Publication of Prospectus

RNS Number : 3670N

Utilico Investments Limited

28 September 2012

 



Utilico Investments Limited

Utilico Finance Limited

(together the "Group")

Proposed placing of new 2018 ZDP Shares

&

Publication of Supplementary Prospectus

Introduction

Utilico Finance Limited ("Utilico Finance"), a wholly owned subsidiary of Utilico Investments Limited ("Utilico" or the "Company"), today announces its intention to seek placing commitments for up to 27,592,413 new 2018 ZDP Shares pursuant to a third closing of the placing described in the prospectus published by Utilico Finance on 2 December 2011 (the "Placing").

Utilico Finance is today publishing a supplementary prospectus (the "Supplementary Prospectus"), following approval by the UK Listing Authority, that is supplemental to, and should be read in conjunction with, the prospectus published by Utilico Finance on 2 December 2011, as updated by a supplementary prospectus published by Utilico Finance on 2 March 2012 (together the "Prospectus").

The publication of the Supplementary Prospectus is a regulatory requirement under the Prospectus Rules following the publication of significant new information, including, inter alia, the publication of the annual reports and audited accounts for Utilico, Utilico Finance and Resolute for the 12 months ended 30 June 2012. Following completion of the Rollover Offer and the issue of 2014 ZDP Shares, 2016 ZDP Shares and 2018 ZDP Shares under previous closings of the Placing, there have also been changes to the illustrative statistics in the Prospectus, and the Assumptions on which they are based, and these revised illustrative statistics and Assumptions are set out in the Supplementary Prospectus and in this announcement.

A copy of the Supplementary Prospectus will be submitted to the National Storage Mechanism and will shortly be available for inspection at: www.Hemscott.com/nsm.do and on the Company's website: www.utilico.bm

Expected Timetable

Latest time for indications of interest	12:00 noon on 12 October 2012
Announcement of the result of the Placing	19 October 2012
Admission of new 2018 ZDP Shares	25 October 2012

(1) The times and dates set out in the Expected Timetable above and mentioned throughout this announcement may be adjusted by the Company, in which event details of the new times and dates will be notified, as required, to the UK Listing Authority and the London Stock Exchange and, where appropriate, to Shareholders.

(2) All references to time in this announcement are to London time.

Terms used and not defined in this announcement bear the meaning given to them in the prospectus published by Utilico Finance dated 2 December 2011.

Placing Statistics*

2018 ZDP Shares

2018 ZDP Share price as at 26 September 2012	107.0p
Accrued Capital Entitlement per 2018 ZDP Share as at 26 September 2012	104.79p
Final Capital Entitlement per 2018 ZDP Share	160.52p
Accrued Capital Entitlement per 2018 ZDP Share as at 25 October 2012	105.37p
Gross Redemption Yield (based on Accrued Capital Entitlement per 2018 ZDP Share price as at 25 October 2012)	7.25%
ZDP Cover following the third closing of the Placing	1.60x

*The statistics set out above are based on the principal bases and assumptions (the "Assumptions") set out below.

The Placing Price for the new 2018 ZDP Shares to be issued under the Placing will be the Accrued Capital Entitlement of the 2018 ZDP Shares at the time of allotment. In addition, as set out in the Prospectus, the allotment of 2018 ZDP Shares pursuant to a Placing is conditional, among other things, on the ZDP Cover of all classes of ZDP Shares being not less than 1.5x taking into account the effect of the relevant allotment (the "ZDP Cover Condition").

Utilico has indicated that it intends to subscribe for all of the remaining 2018 ZDP Shares which are available under the Placing, subject to satisfaction of the ZDP Cover Condition, to the extent that such shares are not subscribed for by other placees pursuant to the Placing. Such shares will be held by Utilico for investment purposes in accordance with its investment policy.

Illustrative financial effects of the Issue

By way of illustration and based upon the Assumptions, if 27.59 million 2018 ZDP Shares are issued pursuant to the Placing, the Group's Gross Assets would have been increased by the estimated gross proceeds of the Placing of £29.1 million, adjusted for the expenses in relation to the Placing estimated to be approximately £0.3 million.

By way of illustration and based upon the Assumptions, if 27.59 million 2018 ZDP Shares are issued pursuant to the Placing the illustrative ZDP Cover for the 2012 ZDP Shares, the 2014 ZDP Shares, the 2016 ZDP Shares and the 2018 ZDP Shares following the Placing would be 7.15x, 3.41x, 2.13x and 1.60x respectively.

These statements are unaudited and are solely for illustrative purposes only, represent a hypothetical situation and, therefore, do not reflect the Group's actual financial position or results.

Final Capital Entitlement

By way of illustration and based upon the Assumptions:

(i)        the Final Capital Entitlement of the 2012 ZDP Shares would have ZDP Cover of approximately 7.15x following completion of the third closing of the Placing.  Based on the Assumptions, if Utilico's Gross Assets were to fall by more than 86.0 per cent. during the period from 25 October 2012 (the anticipated date of completion of the third closing of the Placing) to the 2012 ZDP Repayment Date, this would result in a Final Capital Entitlement per 2012 ZDP Share of less than the 177.52p entitlement per 2012 ZDP Share due on the 2012 ZDP Repayment Date.  A fall in Utilico's Gross Assets of 99.5 per cent. during this period and based on the Assumptions, would result in no payment being made to the 2012 ZDP Shareholders;

(ii)       the Final Capital Entitlement of the 2014 ZDP Shares would have ZDP Cover of approximately 3.41x following completion of the third closing of the Placing. Based on the Assumptions, if Utilico's Gross Assets were to fall by more than 70.7 per cent., or by more than 45.6 per cent. per annum, during the period from 25 October 2012 (the anticipated date of completion of the third closing of the Placing) to the 2014 ZDP Repayment Date, this would result in a Final Capital Entitlement per 2014 ZDP Share of less than the 167.60p entitlement per 2014 ZDP Share due on the 2014 ZDP Repayment Date. A fall in Utilico's Gross Assets of 86.0 per cent. or by more than 62.4 per cent. per annum during this period and based on the Assumptions, would result in no payment being made to the 2014 ZDP Shareholders;

(iii)     the Final Capital Entitlement of the 2016 ZDP Shares would have ZDP Cover of approximately 2.13x following completion of the third closing of the Placing. Based on the Assumptions, if Utilico's Gross Assets were to fall by more than 53.0 per cent., or by more than 17.1 per cent. per annum, during the period from 25 October 2012 (the anticipated date of completion of the third closing of the Placing) to the 2016 ZDP Repayment Date, this would result in a Final Capital Entitlement per 2016 ZDP Share of less than the 192.78p entitlement per 2016 ZDP Share due on the 2016 ZDP Repayment Date. A fall in Utilico's Gross Assets of 70.7 per cent. or by more than 26.3 per cent. per annum during this period and based on the Assumptions, would result in no payment being made to the 2016 ZDP Shareholders; and

(iv)      the Final Capital Entitlement of the 2018 ZDP Shares would have ZDP Cover of approximately 1.60x following completion of the third closing of the Placing. Based on the Assumptions, if Utilico's Gross Assets were to fall by more than 37.5 per cent., or by more than 7.5 per cent. per annum, during the period from 25 October 2012 (the anticipated date of completion of the third closing of the Placing) to the 2018 ZDP Repayment Date, this would result in a Final Capital Entitlement per 2018 ZDP Share of less than the 160.52p entitlement per 2018 ZDP Share due on the 2018 ZDP Repayment Date. A fall in Utilico's Gross Assets of 53.0 per cent. or by more than 11.8 per cent. per annum during this period and based on the Assumptions, would result in no payment being made to the 2018 ZDP Shareholders.

Principal bases and Assumptions

Unless otherwise indicated, the illustrative statistics contained in this announcement relating to the ZDP Shares have been calculated on the following principal bases and assumptions:

·     as at 25 September 2012, there are 99,632,214 Ordinary Shares, 39,342,809 2012 ZDP Shares, 47,500,000 2014 ZDP Shares, 47,500,000 2016 ZDP Shares and  22,250,000 2018 ZDP Shares in issue;

·     the unaudited Gross Assets and Net Asset Value of Utilico as at 25 September 2012 were £489.2 million and £256.5 million respectively;

·     as at 25 September 2012, the Net Asset Value per Ordinary Share was 257.48p;

·     the costs of the third closing of the Placing are approximately £0.3 million (excluding VAT);

·     as at 25 September 2012, Utilico had outstanding debt of £2.6 million;

·     a total of 27.59 million 2018 ZDP Shares are issued pursuant to the third closing of the Placing on 25 October 2012 and such 2018 ZDP Shares are issued, for illustrative purposes, at 105.37p per share, being the Accrued Capital Entitlement as at that date;

·     gross proceeds of £29.1 million are raised pursuant to the third closing of the Placing;

·     the capital accrual of a 2012 ZDP Share is 7.0 per cent. per annum, compounded from a notional issue date of 7 May 2004 up to and including its repayment date and is accounted for on a daily basis in arrears as to 100 per cent. to capital reserve. The Final Capital Entitlement of 177.52p per 2012 ZDP Share is payable on 31 October 2012;

·     the capital accrual of a 2014 ZDP Share is 7.25 per cent. per annum, compounded from an issue date of 15 June 2007 up to and including its repayment date and is accounted for on a daily basis in arrears as to 100 per cent. to capital reserve. The Final Capital Entitlement of 167.60p per 2014 ZDP Share is payable on 31 October 2014;

·     the capital accrual of a 2016 ZDP Share is 7.25 per cent. per annum, compounded from an issue date of 15 June 2007 up to and including its repayment date and is accounted for on a daily basis in arrears as to 100 per cent. to capital reserve. The Final Capital Entitlement of 192.78p per 2016 ZDP Share is payable on 31 October 2016;

·     the capital accrual of a 2018 ZDP Share is 7.25 per cent. per annum, compounded from a notional issue date of 26 January 2012 up to and including its repayment date and is accounted for on a daily basis in arrears as to 100 per cent. to capital reserve. The Final Capital Entitlement of 160.52p per 2018 ZDP Share is payable on 31 October 2018;

·     management fees, interest on borrowings and running expenses are charged 100 per cent. to revenue and the gross revenue receivable is at least equal to these costs;

·     performance fees are calculated and accrued weekly and charged to capital or revenue accounts based on performance;

·     Utilico and Utilico Finance have indefinite lives;

·     there are no changes to generally accepted accounting practices relevant to Utilico; and

·     no redemption, conversions or repurchases of any Ordinary Shares or ZDP Shares are made prior to the redemption of the 2018 ZDP Shares.

For further information please contact:

ICM Investment Research Limited

Charles Jillings                                                                  01372 271486

Westhouse Securities Limited

Alastair Moreton/Darren Vickers                             0207 601 6118

 

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