Proposed Disposal of Interests in GPRL JV

RNS Number : 1119S

Quintain Estates & Development PLC

04 November 2013

 



NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTO ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT JURISDICTION

ALL TERMS ARE DEFINED IN THE APPENDIX TO THIS ANNOUNCEMENT

4 November 2013

Quintain Estates and Development plc ("Quintain" or the "Company")

Proposed Disposal of the Company's Interests in GPRL Joint Venture

Summary

·     The Board of Quintain today announces that the Company has entered into a conditional Sale and Purchase Agreement for the sale of its remaining interests in Greenwich Peninsula Regeneration Limited ("GPRL") to the Company's current joint venture partner, Knight Dragon Limited ("Knight Dragon") (an investment vehicle ultimately owned by Dr. Henry Cheng Kar-Shun, a Hong Kong-based businessman).

·     The total aggregate proceeds to be received on Completion by Quintain is £230 million and includes the acceleration of Knight Dragon's existing obligations to pay the Company £50 million on a deferred basis in three instalments over a six-year term pursuant to arrangements entered into on completion of the GPRL joint venture in July 2012. 

·     The profit that Quintain will realise from the Transaction will result in an increase in net assets of approximately £34.6 million, or 7 pence (6.4 per cent.) per Ordinary Share.

·     The Board of Quintain believes the proposed Transaction presents a compelling opportunity to maximise value for Shareholders, delivering increased certainty by crystallising future profits and cash flows from the Company's 40 per cent. stake in GPRL at an early stage.

·     In less than 18 months, Quintain has introduced a new partner to Greenwich Peninsula, with which it has materially enhanced the value of the site, and is now realising its share of the value of these endeavours. In doing so, Quintain has unlocked the development of this important site for London and the inherent value within it for Shareholders.

·     The assets being disposed represent approximately 20 per cent. of Quintain's gross asset value and, as well as generating an increase in net assets of £34.6 million (6.4 per cent.), the Transaction will see the Group's net debt fall by some 52 per cent. from £443.6 million to £217.6 million, on a pro-forma basis at 31 March 2013.

·     The Directors believe this Transaction will deliver four important benefits to Shareholders:

-    improved financial position: the proceeds arising from the proposed Transaction will significantly accelerate Quintain's de-leveraging strategy, reducing net debt to below £300 million, the long-term target, transforming Quintain's balance sheet and enabling the Company to embark upon a new phase of growth for the first time in a decade;

-    improved profitability: the effects of the proposed Transaction will be immediately earnings enhancing with the reduced finance expense, removal of Quintain's share of joint venture operational costs and reduced overheads within Quintain, more than offsetting the profit from the fee income which will no longer be earned from GPRL;

-    accelerated delivery of Wembley Park: the Transaction will enable the Company to increase the quantum and ambition of the next phase of development at the 8.7 million sqft Wembley Park site; and

-    focused growth: the proceeds arising from the Transaction will facilitate investment in strategically core growth opportunities in key markets of London which offer the potential for yield, capital growth and outperformance, utilising the skills of Quintain's experienced London team.

·     Knight Dragon acquired its 60 per cent. interest in the shares of GPRL and GPRL Loan Stock in July 2012 for approximately £175 million (of which £50 million was payable in instalments over a six year period). In connection with the acquisition, Knight Dragon agreed to provide £300 million of funding to GPRL at a cost of Libor + 5 per cent. and Quintain was appointed Development Manager for an initial period of six years.

·     Under the terms of the Sale and Purchase Agreement, the Company will sell to Knight Dragon its remaining 40 per cent. shareholding in GPRL, together with all the GPRL Loan Stock held by the Company. Completion of the Transaction is conditional solely on the approval of Shareholders.

·     Knight Dragon will pay the Company an aggregate cash amount of £230.0 million at Completion, approximately £186.0 million of which represents consideration for the purchase of the GPRL Shares and GPRL Loan Stock held by the Company and approximately £44.0 million of which will satisfy Knight Dragon's obligation to repay all amounts outstanding to the Company under the Deferred Loan Agreement. These interests were included in Quintain's balance sheet at £155.0 million and £43.3 million, respectively (together, £198.3 million) at 31 March 2013. The profit to be realised from the Transaction is £34.6 million on a pro-forma basis after tax and costs of approximately £4.0 million. On a historic cost basis, the realised pre-tax profit is approximately £117.3 million, demonstrating the value added by Quintain during its years of involvement in the site.

·     Quintain does not revalue its interests in GPRL for its financial statements as the underlying land is accounted for within inventory (current assets). Notwithstanding this, a valuation has been prepared specifically for this Transaction and this shows a surplus to the carrying value in Quintain's underlying accounting records of £26.0 million. This compares to the pre-tax premium to net assets arising on the Transaction of £31.7 million (before tax and expenses).

·     In connection with the Sale and Purchase Agreement, and subject to and with effect from Completion, the GPRL Joint Venture Agreement and the Development Management Agreement will be terminated and the parties will be released from their obligations under those agreements. In addition, with effect from Completion, the Company will no longer be required to provide site wide development management services and administrative services to the GPRL Group at Greenwich Peninsula pursuant to the Development Management Services Agreement Sub-Contract and will be indemnified by Knight Dragon for any future obligations for so long as the Development Management Services Agreement Sub-Contract remains in force. To facilitate an orderly handover, the Company has agreed to provide GPRL with certain transitional advisory services for a six month period from Completion on a cost plus basis.

·     Following the Transaction, the Company will no longer have any interest in GPRL, although the Company continues to own and control the Retail Interests and a 50 per cent. joint venture interest in the 6 Mitre Passage office building, both of which are located on the Greenwich Peninsula.

·     The Directors would like to thank the Greenwich team for their hard work and commitment to the development as this has played a large part in enabling the Company to realise this enhanced value for Shareholders.

·     The Transaction constitutes a Class 1 transaction for the Company under the Listing Rules. As such, a circular will be posted to Shareholders seeking Shareholder approval at a general meeting expected to be held on 21 November 2013, with Completion scheduled for 22 November 2013.

·     Those directors with legal and / or beneficial interests in the Company's share capital have provided irrevocable undertakings that they will vote (or as far as they are able will procure that votes are cast) in favour of the Transaction. These irrevocable undertakings amount to 878,853 Ordinary Shares, in aggregate, representing approximately 0.17 per cent. of the existing issued share capital of the Company. The Company has also received an irrevocable undertaking from Caledonia Investments Plc pursuant to which it undertakes that it will vote (or so far as it is able will procure that votes are cast) in favour of the Transaction in respect of its entire interest of 40,659,584 Ordinary Shares, representing approximately 7.80 per cent. of the existing issued share capital of the Company.

Commenting on the Transaction, Maxwell James, Chief Executive of Quintain said: 

"This is a compelling transaction for Quintain which, on attractive terms, delivers financial stability and certainty for our shareholders by crystallising future profits and cash flows at an early stage. The deal reflects the step change in value created at Greenwich Peninsula since the formation of our joint venture with Knight Dragon last year.

"We have now completed Quintain's wider corporate repositioning, paving the way for a new phase of profitable growth for Quintain. We can now accelerate our major commercial and residential scheme at Wembley Park, building on this month's opening of the London Designer Outlet and, with a strengthened financial position, Quintain's highly experienced London team is well positioned to exploit new opportunities investing in selected income and value creating assets in the key London markets."

Commenting on the Transaction, Sammy Lee, of Knight Dragon said:

"Greenwich Peninsula represents a unique opportunity to deliver one of the largest regeneration schemes in Europe and Knight Dragon is fully committed to delivering this landmark development for London, creating thousands of new jobs, new homes and a community where people will want to live.

"Our joint venture with Quintain has achieved a great deal over the past year and a half.  We are now looking forward to building on the momentum which has been created during the last 16 months."

Presentation to institutional investors and analysts

Institutional investors and analysts are invited to dial into a conference call at 2.00pm (UK time) on 4 November 2013 with a replay facility available afterwards on demand for 7 days. The presentation will be available on the Quintain website atwww.quintain.co.uk.

Participant Dial in: [phone]

Password: Quintain

Replay facility for 7 days - Dial in: [phone]

Access PIN: 4007437

ENQUIRIES:

Quintain Estates and Development plc

Maxwell James, Chief Executive                                                            Tel: [phone]

Richard Stearn, Finance Director

HSBC Bank Plc, Sole Financial Adviser and Sole Sponsor to Quintain

John Herbert                                                                                         Tel: [phone]

Richard Choi

Oliver Smith

Barclays Bank PLC, Joint Corporate Broker to Quintain

Tom Boardman                                                                                     Tel: [phone]

J.P. Morgan Cazenove, Joint Corporate Broker to Quintain

Robert Fowlds                                                                                       Tel: [phone]

Bronson Albery                                                                                    

RLM Finsbury

James Bradley                                                                                      Tel: [phone]

Jenny Davey 

For Knight Dragon Limited  

Edelman                                             

Jo Sheldon                                                                                            Tel: + 44 (0) 20 3047 2180

Nick Barron

Important notices

The release, publication or distribution of this announcement in jurisdictions other than the United Kingdom may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves about, and observe, any applicable requirements.  This announcement has been prepared for the purposes of complying with the Listing Rules and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws and regulations of any jurisdiction outside of England.

Forward-looking statements

This announcement includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will", or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions.  These forward-looking statements include all matters that are not historical facts.  They appear in a number of places throughout this announcement and include, but are not limited to, statements regarding Quintain's intentions, beliefs or current expectations concerning, among other things, the Group's results of operations, financial position, prospects, growth, strategies and the industry in which it operates.  By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Forward-looking statements are not guarantees of future performance and the actual results of the Group's operations, financial position and liquidity, and the development of the markets and the industry in which the Group operates, may differ materially from those described in, or suggested by, the forward-looking statements contained in this announcement. In addition, even if the results of operations, financial position and the development of the markets and the industry in which the Group operates are consistent with the forward-looking statements contained in this announcement, those results or developments may not be indicative of results or developments in subsequent periods. A number of factors could cause results and developments to differ materially from those expressed or implied by the forward-looking statements including, without limitation, general economic and business conditions, industry trends, competition, changes in regulation, currency fluctuations, changes in its business strategy, political and economic uncertainty and other factors.

Forward-looking statements may, and often do, differ materially from actual results.  Any forward-looking statements in this announcement speak only as of their respective dates, reflect the Group's current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Group's operations, results of operations and growth strategy. Subject to the requirements of the Financial Conduct Authority, the London Stock Exchange, the Listing Rules and Disclosure and Transparency Rules (and/or any regulatory requirements) or applicable law, the Group explicitly disclaims any obligation or undertaking publicly to release the result of any revisions to any forward-looking statements in this announcement that may occur due to any change in the Company's expectations or to reflect events or circumstances after the date of this announcement.

Other

No statement in this announcement is intended as a profit forecast or profit estimate and no statement in this announcement should be interpreted to mean that the earnings per share of the Group or GPRL for the current or future financial periods will necessarily match or exceed the historical or published earnings per share of the Group or GPRL.

Certain figures in this announcement have been subject to rounding adjustments.

HSBC Bank plc is authorised by the Prudential Regulation Authority ("PRA") and regulated by the PRA and the Financial Conduct Authority, is acting as sole financial adviser and sole sponsor to Quintain and no-one else in connection with the Transaction and the contents of this announcement and will not be responsible to anyone other than Quintain for providing the protections afforded to clients of HSBC Bank Plc, or for providing advice in relation to any of the Transaction, the contents of this announcement or any matters referred to herein.

Barclays Bank PLC is authorised by the PRA and regulated by the PRA and the Financial Conduct Authority, is acting as joint corporate broker to Quintain and no-one else in connection with the Transaction and the contents of this announcement and will not be responsible to anyone other than Quintain for providing the protections afforded to clients of Barclays Bank PLC, or for providing advice in relation to any of the Transaction, the contents of this announcement or any matters referred to herein.

J.P. Morgan Securities plc, which uses the marketing name of J.P. Morgan Cazenove in the UK, is authorised by the PRA and regulated by the PRA and the Financial Conduct Authority, is acting as joint corporate broker to Quintain and no-one else in connection with the Transaction and the contents of this announcement and will not be responsible to anyone other than Quintain for providing the protections afforded to clients of J.P. Morgan Cazenove, or for providing advice in relation to any of the Transaction, the contents of this announcement or any matters referred to herein.

Introduction

The Board of Quintain is pleased to announce that the Company has entered into a conditional Sale and Purchase Agreement for the sale of its remaining interest in GPRL to the Company's current joint venture partner, Knight Dragon (an investment vehicle ultimately owned by Dr. Henry Cheng Kar-Shun, a Hong Kong based businessman) for an aggregate sale price of approximately £186.0 million. In addition, Knight Dragon has agreed to pay the Company approximately £44.0 million in cash on Completion to satisfy its payment obligations to Quintain related to the £50.0 million deferred instalments which were due in three instalments over a six year term as agreed on completion of the joint venture in July 2012.

Under the terms of the Transaction, the Company will sell to Knight Dragon its remaining 40 per cent. shareholding in GPRL, together with all the GPRL Loan Stock held by the Company. In addition, the Development Management Agreement and the current GPRL Joint Venture Agreement between the Company, Knight Dragon, GPRL and Chow Tai Fook Enterprises will be terminated from Completion. Following the Transaction, the Company will no longer have any interest in GPRL (although the Company will continue to hold the Retail Interests and, in partnership with Lend Lease, a 50 per cent. joint venture interest in the 6 Mitre Passage office building, both of which are located on the Greenwich Peninsula).

Background to and reasons for the Transaction

(a)  Background

Quintain's business is focused on property investment and development within London. Through Quintain's London development business, the Company aims to generate profit and capital growth principally through the master planning and development of its two large mixed-use projects at Wembley Park and Greenwich Peninsula.

Quintain acquired its interest in the wider Greenwich Peninsula scheme in 2002, having previously acquired interests at Peninsula Quays. Quintain and its previous joint venture partner, Lend Lease, secured permission for a 14 million sqft master plan (of which 12.6 million sqft remains to be developed) which provides for the creation of over 10,000 homes, a 3.5 million sqft commercial district and 350,000 sqft of retail space along approximately 1.6 miles of Thames river frontage. Quintain and Lend Lease subsequently introduced AEG as operators of the O2 entertainment complex and completed the first stages of development around the public real spaces in front of The O2, including more than 10 retail units along Peninsula Square; over 420,000 sqft of offices at Pier Walk and Mitre Passage and Ravensbourne College; the disposal of land to Bellway for the development of 229 residential units, now completed; and the cable car over the Thames.

In July 2012, Quintain announced the completion of its new joint venture arrangements in respect of its interests in the Greenwich Peninsula, pursuant to which Knight Dragon replaced Lend Lease as Quintain's partner in relation to the development of the GPRL Group's land interests at Greenwich Peninsula. Knight Dragon acquired a 60 per cent. interest in GPRL and Quintain's interests in Peninsula Quays were transferred to GPRL to align the interests of Quintain and Knight Dragon in the joint venture.

In addition, under the terms of the joint venture, Knight Dragon agreed to provide the GPRL Group with up to £300 million of financing, accelerating the delivery of homes into a market facing an acute shortage of quality residential supply, without the need for Quintain to provide further funding.

Since the establishment of the joint venture between Quintain and Knight Dragon in July 2012, Quintain and Knight Dragon have continued to make progress on the development activities at the Greenwich Peninsula, achieving two milestone planning decisions that should help propel the development into delivery mode:

·     a new master-plan for Peninsula Quays has been granted out-line planning consent. This design, which provides for towers of up to 32 storeys, 1,683 apartments, two hotels and 90,000 sqft of shops and restaurants, creates a new benchmark for the quality of cohesive development that will be delivered by the GPRL Group; and

·     a deed of variation to the original Section 106 Agreement, re-distributing the tenure of affordable housing, has been secured.

Together, the Directors believe that these decisions improve the development potential and quality that is now being created at Greenwich Peninsula.

In less than 18 months, Quintain has introduced a new partner to Greenwich Peninsula, with which it has materially enhanced the value of the site, and is now realising its share of the value of these endeavours.  In doing so, Quintain has unlocked the development of this important site for London and the inherent value within it for Shareholders.

The proposed Transaction presents a transformational and compelling opportunity for Quintain to crystallise, at an early stage, the profits arising from these decisions and to realise the inherent value of its investment in GPRL, delivering value and certainty for Shareholders.

(b)  Reasons for the Transaction

The Board of Quintain believes the proposed Transaction delivers value and certainty for Quintain's shareholders by crystallising future profits and cash flows at an early stage. The Directors believe this Transaction will deliver four important benefits to Shareholders:

·     improved financial position: the proceeds arising from the proposed Transaction will significantly accelerate Quintain's de-leveraging strategy, reducing net debt to below £300 million, the long-term target, materially ahead of schedule, transforming Quintain's balance sheet and enabling the Company to embark upon a new phase of growth for the first time in a decade;

·     improved profitability: the proposed Transaction will be immediately earnings enhancing with the reduced finance expense, removal of Quintain's share of joint venture operational costs and reduced overheads within Quintain, more than offsetting the profit from the fee income which will no longer be earned from GPRL;

·     accelerated delivery of Wembley Park: the Transaction will enable the Company to increase the quantum and ambition of  the next phase of development at the 8.7 million sqft Wembley Park site and, following its successful opening last month, now boasts London's only Designer Outlet Centre to sit alongside the 4-star Hilton Hotel and revitalised Wembley Arena (now under AEG's management); and

·     focused growth: the proceeds arising from the Transaction will facilitate investment in strategically core growth opportunities in key markets of London which offer the potential for yield, capital growth and outperformance, utilising the skills of Quintain's experienced London team.

Principal terms of the Transaction

As described above, the Company will sell to Knight Dragon its remaining 40 per cent. shareholding in GPRL, together with all the GPRL Loan Stock held by the Company, pursuant to the Sale and Purchase Agreement. Completion of the Transaction is conditional on the approval of Shareholders, as described below.

Under the terms of the Transaction, Knight Dragon will pay the Company an aggregate cash amount of £230 million at Completion, approximately £186.0 million of which represents consideration for the purchase of the GPRL Shares and GPRL Loan Stock held by the Company and approximately £44.0 million of which is in full and final satisfaction of Knight Dragon's obligation to repay all amounts owing to the Company under the Deferred Loan Agreement. These interests were included in Quintain's balance sheet at £155.0 million and £43.3 million, respectively (together, £198.3 million) at 31 March 2013. The profit to be realised from the Transaction is, therefore, £34.6 million on a pro-forma basis after tax and costs of approximately £4.0 million, or 7 pence (6.4 per cent.) per Ordinary Share. On a historic cost basis, the realised profit is approximately £117.3 million, demonstrating the value added by Quintain during its years of involvement in the site.

In connection with the Sale and Purchase Agreement, and subject to and with effect from Completion, the GPRL Joint Venture Agreement and the Development Management Agreement will be terminated and the parties will be released from their obligations under those agreements. In addition, with effect from Completion, the Company will no longer be required to provide site wide development management services and administrative services to the GPRL Group at Greenwich Peninsula pursuant to the Development Management Services Agreement Sub-Contract and will be indemnified by Knight Dragon for any future obligations for so long as the Development Management Services Agreement Sub-Contract remains in force. To facilitate an orderly handover, the Company has agreed to provide GPRL with certain transitional advisory services for a six month period from Completion on a cost plus basis.

Following the Transaction, the Company will no longer have any interest in GPRL, although the Company continues to own and control the Retail Interests and, in joint venture with Lend Lease, the 6 Mitre Passage office building, both of which are located on the Greenwich Peninsula.

Conditions of the Transaction

The Transaction will constitute a Class 1 transaction for the Company under the Listing Rules. As such, the approval of a simple majority of the shareholders of Quintain is required before the Transaction can be completed. A circular containing details of the Transaction and including notice convening a general meeting of the Company, at which Shareholders' approval will be sought for the Transaction, will be sent to Shareholders shortly. Completion of the Transaction is expected to occur on 22 November 2013.

The circular will include the unanimous recommendation of the Board of Quintain that Shareholders should vote in favour of the resolutions required to approve the Transaction at the general meeting.

Those directors with legal and / or beneficial interests in the Company's share capital have provided irrevocable undertakings that they will vote (or as far as they are able will procure that votes are cast) in favour of the Transaction. These irrevocable undertakings amount to 878,853 Ordinary Shares, in aggregate, representing approximately 0.17 per cent. of the existing issued share capital of the Company. The Company has also received an irrevocable undertaking from Caledonia Investments Plc pursuant to which it undertakes that it will vote (or as far as it is able will procure that votes are cast) in favour of the Transaction in respect of its entire interest of 40,659,584 Ordinary Shares, representing approximately 7.80 per cent. of the existing issued share capital of the Company.

Financial effects of the Transaction

As described above, the Company will receive £230 million (in aggregate) in cash in connection with the Transaction immediately upon Completion.

The Company intends to use principally all of the proceeds that it receives pursuant to the Transaction to reduce the level of the Group's net debt.  The Company will then be in a position to selectively invest in attractive growth opportunities that allow Quintain to utilise its investment and development skills in the London market in line with its corporate strategy to create value for Shareholders.

Quintain's share of its investment in joint ventures will reduce by £155.0m following the disposal of its interests in GPRL, represented principally by the Greenwich Peninsula development site held within inventories (current assets) in GPRL's balance sheet.

The Transaction will result in an uplift in net asset value for Quintain achieved over a short duration, representing an approximate 20 per cent. return over the book value of GPRL in Quintain's balance sheet as at 31 March 2013, and be immediately earnings enhancing  as the reduced finance expense,  removal of Quintain's share of joint venture operating costs and reduced overheads within Quintain will more than off-set the estimated fee income which will no longer be earned under the Development Management Agreements. The Transaction also includes the acceleration of the £50.0 million deferred payments by Knight Dragon provided for in the Deferred Loan Agreement, which would otherwise only have been realised fully in July 2018.

For the 12 months ended 31 March 2013, Quintain reported a loss of £1.2 million attributable to the assets the subject of the Transaction. The value of the gross assets and net assets (as at 31 March 2013) the subject of the Transaction was £165.0 million and £155.0 million respectively (excluding, for the avoidance of doubt, the £50 million (the net present value of which as at 31 March 2013 was 43.3 million) owed to the Company under the Deferred Loan Agreement).

As a consequence of the Transaction, it is expected that the net assets of the Company will be increased at Completion by £34.6 million from £538.4 million as at 31 March 2013 to £573.0 million (an increase of approximately 6.4 per cent. of the Company's net assets).

The assets being disposed represent approximately 20 per cent. of Quintain's gross asset value and, as well as generating an increase in net assets of £34.6 million (6.4 per cent.), the Transaction will see the Group's net debt fall by some 52 per cent. from £443.6 million to £217.6 million, on a pro-forma basis at 31 March 2013.

The Board expects that the Transaction will enable the Company to complete its repositioning early, further strengthen its financial position by normalising its balance sheet, drive portfolio momentum, accelerate the growth of its business with a total returns focus by leveraging its central London expertise and realise the full value of its minority investment, crystallising the uplift arising from its interests in GPRL.

Information on GPRL

The principal activity of GPRL and its subsidiaries is the holding for the purposes of development of certain land at Greenwich Peninsula and the investment in property development companies and joint ventures for the purposes of developing land holdings at Greenwich Peninsula. To date, the GPRL Group has focused on investing in infrastructure at Greenwich Peninsula to facilitate development on its land and land owned by the GLA.

The GPRL Group currently has secured planning consent for the development of 2,900 homes and is actively in construction phase for the first 500 new homes.

Information on Knight Dragon

Knight Dragon, which acquired a 60 per cent. interest in GPRL in July 2012,  is a company incorporated in Hong Kong and is an investment vehicle indirectly owned by Dr. Henry Cheng Kar-Shun. Dr. Cheng is Chairman of New World Development, a Hong Kong listed conglomerate with a market capitalisation of approximately £5.5 billion and which has substantial interests in property and infrastructure in Hong Kong and China. Dr. Cheng, and the wider Cheng family, control Chow Tai Fook Enterprises, which has a substantial interest in New World Development. Chow Tai Fook Enterprises is guaranteeing the obligations of Knight Dragon and the GPRL Group in relation to the Transaction.

 

APPENDIX

DEFINITIONS

The following definitions apply throughout this announcement, unless the context otherwise requires:

"Board", "Board of Quintain" or "Directors"	the directors of the Company as at the date of this announcement
"Chow Tai Fook Enterprises" "Company" or "Quintain"	Chow Tai Fook Enterprises Limited Quintain Estates and Development plc
"Completion"	completion of the Transaction, expected to occur on or about 22 November 2013
"Deferred Loan Agreement"	the £50 million deferred loan agreement between GPRL, Knight Dragon and Chow Tai Fook Enterprises entered into on 18 June 2012
"Development Management Agreements"	the Development Management Agreement, the Development Management Services Agreement and the Development Management Services Agreement Sub-Contract
"Development Management Agreement"	the agreement entered into on 27 July 2012 between the Company and GPRL pursuant to which the Company provides the GPRL Group with development management and project management services at Greenwich Peninsula
"Development Management Services Agreement"		the agreement entered into between Lend Lease, GPRL, MDL and others on 23 May 2007
"Development Management Services Agreement Sub‑Contract"		the agreement entered into pursuant to the Development Management Services Agreement on 27 July 2012 between GPRL, the Company, Lend Lease and others
"Disclosure and Transparency Rules"	the Disclosure and Transparency Rules of the FCA
"FCA"	the Financial Conduct Authority
"General Meeting"	the general meeting of the Company expected to be held at 10.00 a.m. on 21 November 2013 at the Hilton Hotel, Lakeside Way, Wembley, Middlesex HA9 0BU and including any adjournment thereof
"GLA"	the Greater London Authority and its subsidiary undertakings (including GLA Land and Property Limited, to which the property rights, liabilities and interests of the Homes and Communities Agency in relation to Greenwich Peninsula have been transferred)
"GPRL"	Greenwich Peninsula Regeneration Limited, the joint venture holding company which is the subject of the Transaction
"GPRL Group"	GPRL and its subsidiaries and its subsidiary undertakings
"GPRL Joint Venture Agreement"	the joint venture agreement entered into on 27 July 2012 between the Company, Knight Dragon, Chow Tai Fook Enterprises and GPRL
"GPRL Loan Stock"	the infrastructure loan notes issued by GPRL which are currently held as to 60 per cent. by Knight Dragon and as to 40 per cent. by Quintain
"Group"	the Company and its subsidiaries and subsidiary undertakings
"HSBC" "Knight Dragon"	HSBC Bank plc Knight Dragon Limited
"Lend Lease"	Lend Lease Europe Limited
"Listing Rules"	the listing rules made by the UKLA
"London Stock Exchange" or LSE"	London Stock Exchange
"New World Development"	New World Development Co. Ltd
"Notice"	the notice set out at the end of the circular convening the General Meeting to be held for the purpose of considering and, if thought fit, passing the resolution approving the Transaction
"Ordinary Shares"	fully paid ordinary shares of 25 pence each in the capital of the Company
"Peninsula Quays"	that part of Greenwich Peninsula known as Peninsula Quays
"Retail Interests"	the Company's interests in the Greenwich Peninsula Retail LLP and GPRL Retail Limited
"Sale and Purchase Agreement"	the sale and purchase agreement between Quintain and Knight Dragon dated 4 November 2013 documenting the sale of Quintain's remaining interest in GPRL to Knight Dragon
"sqft"	a square foot or square feet, as the context requires
"Shareholder"	a holder of Ordinary Shares
"Transaction"	the transaction to be consummated pursuant to the Sale and Purchase Agreement and agreements entered into in connection with the Sale and Purchase Agreement
"UK"	United Kingdom of Great Britain and Northern Ireland, its territories and dependencies
"UK Listing Authority" or "UKLA"	the FCA acting in its capacity as the competent authority for the purposes of Part VI of FSMA

 

END

 

 

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