Result of Placing

RNS Number : 8812D

Ground Rents Income Fund PLC

03 May 2013

 



NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, DIRECTLY OR INDIRECTLY, TO U.S. PERSONS OR INTO OR IN THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A BREACH OF THE RELEVANT LAWS OF SUCH JURISDICTION.

THIS ANNOUNCEMENT DOES NOT CONSTITUTE A PROSPECTUS OR OFFERING MEMORANDUM OR AN OFFER IN RESPECT OF ANY SECURITIES. IT IS NOT AND NOR IS IT INTENDED TO PROVIDE THE BASIS FOR ANY DECISION IN RESPECT OF GROUND RENTS INCOME FUND PLC ("GRIF" OR THE "COMPANY") OR OTHER EVALUATION OF ANY SECURITIES OF GRIF OR ANY OTHER ENTITY AND SHOULD NOT BE CONSIDERED AS A RECOMMENDATION THAT ANY INVESTOR SHOULD SUBSCRIBE FOR, PURCHASE OR OTHERWISE DEAL IN ANY SUCH SECURITIES. NEITHER THE ISSUE OF THIS ANNOUNCEMENT NOR ANY PART OF ITS CONTENTS CONSTITUTES AN OFFER TO SELL OR INVITATION TO PURCHASE ANY SECURITIES OF GRIF OR ANY OTHER ENTITY OR ANY PERSONS HOLDING SECURITIES OF GRIF.

Ground Rents Income Fund plc

Results of Placing, Notice of General Meeting and Publication of CISX Listing Document

Ground Rents Income Fund plc ("GRIF" or "the Company"), a listed real estate investment trust (REIT) investing in UK ground rents, is pleased to announce that it has conditionally raised £38.6 million (before costs) through a placing of Convertible Preference Shares in the Company.

The Convertible Preference Shares will be entitled to a fixed cumulative preferential dividend at an annual rate of 2 per cent., payable quarterly.  The Convertible Preference Shares will convert into Ordinary Shares at a ratio based on the Net Asset Value per Convertible Preference Share and the Net Asset Value per Ordinary Share which will be calculated upon the earlier of: (a) 12 months after Admission; and (b) once 90 per cent. of the subscription monies attributable to the Placing have been invested or committed to be invested.

The net proceeds of the Placing will, after deducting all expenses, (fixed at 2 per cent. of the gross placing proceeds), be substantially invested in future Ground Rent investments as well as to fund the Company's operational expenses, in accordance with the Company's investment objective.

The Company's investment strategy is to continue to acquire portfolios of Ground Rents comprising the freeholds and Long Dated head leases of residential, retail and commercial properties in the United Kingdom.  These interests have and will have a pre-determined long-term income stream from the lease and, ultimately, when the lease comes to an end, a reversionary value.  Collection of Ground Rents, as well as income from additional sources such as insurance policies, is expected to provide predictable income streams. 

The Placing is conditional on shareholder approval and admission of the Convertible Preference Shares to the Official List of the CISX and to trading on the SETSqx platform of the London Stock Exchange.  A circular ("Circular") containing a Notice of General Meeting, convened for 10.30 a.m. on 23 May 2013, has today been sent to Shareholders of the Company outlining the terms of the Placing and seeking Shareholder approval to, inter alia, enable the Directors to allot the Convertible Preference Shares in connection with the Placing. 

The shares were placed by N+1 Singer, the Company's financial adviser and sole placing agent.

The Company has also published a listing document today in connection with the issue of the Convertible Preference Shares ("Listing Document"). The definitions used in this announcement are as set out in the Listing Document.  Further details of Placing are set out in the Listing Document, which will shortly be available (together with the Circular) on the Company's website: http://www.groundrentsincomefund.com/.

Malcolm Naish, Chairman of GRIF, said:

"It has always been the desire of shareholders to see the vehicle grow significantly and this second round of funding increases the size of the fund by approximately 77%.

The convertible preference share has been structured to perform in a similar way to a "C" share issue, common in investment trusts, in accordance with the REIT regime, and so that we may continue to pay the target dividend yield to ordinary shareholders."

James Agar, Investment Director of Brooks Macdonald Funds, on behalf of the Investment Manager, said:

"The pace at which we have been able to invest the IPO capital and secure high quality assets, has been very pleasing.  Coupled with reducing cash drag on GRIF's performance, this has allowed the Company to pay a year one dividend yield ahead of expectation.

In addition to this, we have gradually increased our exposure to index-linked assets from the proposed constituent mix at launch. This is a positive development in an economic environment of negative gross redemption yields on lower risk, index-linked instruments. We hope to continue, and potentially increase, the percentage of the portfolio with direct links to RPI, in order to provide as much inflation hedging as possible to shareholders.

We have some excellent visibility on the investment of the net proceeds of the Placing. With a fund size now of approximately £88.7 million and new shareholders added to the register, we expect to see a strong secondary market."

Expected Timetable

General Meeting	10.30 a.m. on 23 May 2013
Admission and commencement of dealings in Convertible Preference Shares on CISX and SETSqx	8.00 a.m. on 24 May 2013
CREST accounts expected to be credited with Convertible Preference Shares to be held in uncertificated form	24 May 2013
Despatch of definitive share certificates (if applicable) in respect of Convertible Preference Shares to be held in certificated form*	The week commencing 10 June 2013
Long stop date for calculation of Convertible Preference Shares Conversion Ratio	24 May 2013

* Each of the times and dates set out below are subject to change without further notice. All times are London times unless otherwise stated.

Contacts:

Braemar Estates (Residential) Limited Simon Wombwell / James Agar	020 7499 6424
N+1 Singer James Maxwell / Jenny Wyllie - Corporate Finance Alan Geeves / Sam Greatrex - Sales	020 7496 3000
Appleby Securities (Channel Islands) Limited Helen Crossley / Gemma Campbell	01481 755600
MHP Communications Reg Hoare / Barnaby Fry / Simon Hockridge / Giles Robinson	0203 128 8100

Website: www.groundrentsincomefund.com

 

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