Timetable for Audited Accounts and Company Update

AXA Property Trust Limited
(a closed-ended investment company incorporated with limited liability under the laws of Guernsey with registered number 43007)
LEI Number: 213800AF85VEZMDMF931
 

AXA Property Trust Limited (the "Company") – Timetable for Publication of Audited Financial Statements and Company Update

19 October 2018

As a result of the events described below, and despite the Company’s best efforts, the Company's audited financial statements for the financial year ended 30 June 2018 will not be published by the deadline of 31 October 2018 required by the Listing Rules. The Company will however announce unaudited annual financial statements prior to 31 October 2018.

Background

In August 2018 the Board issued a Shareholder Circular (“the Circular”) with proposals and recommendations to:

1. put the Company into voluntarily liquidation in accordance with the Companies Law,
2. appoint Linda Johnson and Ashley Paxton of KPMG Channel Islands Limited as Liquidators, and
3. cancel the admission of its shares to the Official List of the UK Listing Authority and to trading on the Main Market of the London Stock Exchange (the “Proposals”).

The decision to recommend the voluntary liquidation of the Company was initiated in 2013 when the managed wind-down of the Company was approved by Shareholders through a change in its investment policy and objective with the intention of realising all remaining assets and returning the proceeds to the shareholders in an orderly manner. As a result, there is now only one asset remaining in the portfolio, a property in Curno, Italy. As the managed wind-down has reached an advanced stage, plans for the final winding-up and liquidation were confirmed in an announcement on 22 June 2018 and were subsequently set out in detail in the Circular.

The Circular included a review of the Company’s operating cost structure having regard to the uncertain prospects of achieving a sale of the Curno property and the reducing rental income. As a result of this analysis the Board considered there were significant cost savings that would be achieved.

It was also explained within the Circular that no financial statements of the Company or updated NAV would be prepared for the financial year ended 30 June 2018 or subsequent years once the liquidation was approved. This was re-confirmed on 30 August 2018 when the Company released unaudited financial information for the period ending 30 June 2018. In expectation of the Proposals being approved, the existing auditor to the Company, KPMG Channel Islands Limited, gave notice of their resignation, contingent upon the Proposals being passed by letter dated 5 July 2018.

Shareholder meetings

An EGM was scheduled for 7 September 2018, at which shareholders were due to vote on the Proposals. The EGM took place as scheduled, but it was adjourned until 21 September 2018 following the attendance of representatives of shareholders accounting for approximately 30% of the voting rights who expressed their intention to vote against the Proposals, which required 75% approval of those voting in order to be passed. The Board was made aware of their intentions less than 24 hours before the meeting was scheduled to start.

The Adjourned EGM took place on 21 September 2018. However, the Proposals were not approved. A single shareholder came to hold a 29.8% interest in the Company prior to the Adjourned EGM. At the Adjourned EGM, the Proposals were supported by shareholders representing 38.3% of the issued shares of the Company, amounting to 56.2% of those voting at the Adjourned EGM. However, the shareholder holding shares representing 29.8% of the Company voted against the Proposals and effectively blocked them as a 75% majority was required.

Audited annual financial statements

As the Company retained its listing on the Official List of the UK Listing Authority and is bound by the Disclosure Guidance and Transparency and Listing Rules, arrangements are in hand to prepare audited annual financial statements for the year ended 30 June 2018.

There are a number of factors which will need to be addressed as part of the audit process which include;

1. a multi-jurisdictional audit approach requiring overseas subsidiary companies financial statements to be audited,
2. independent scrutiny of the going concern presumption applicable to the managed wind down strategy and requirement for ongoing liquidity noted in the Circular, and
3. short notice for the planning and execution phase.

In view of the above, the auditor has reported that it is not possible to complete the audit in time for the Disclosure Guidance and Transparency Rules deadline of 31 October 2018. It is unlikely that the audit will be completed before 31 December 2018. However unaudited annual financial statements for the Company are being finalised and will be announced prior to 31 October 2018.

The Directors note that under Listing Rule 5.1.2 (2) the FCA may suspend listing where the issuer has failed to publish financial information in accordance with the Listing Rules. The Directors will therefore be making a conditional request to the FCA that listing of the Company’s shares be suspended, conditional upon failure to publish the audited financial statements by 31 October 2018. An announcement on any future suspension will be made as and when appropriate, whilst the Company uses its best endeavours in the meantime to assist the auditors to complete the audit of its annual financial statements.

Company update

The Directors have consulted with the shareholder who voted against the Proposals.  As indicated in the Company’s announcement issued on 5 October 2018, the shareholder has indicated a wish to present an alternative plan for the continuation of the Company with a different investment policy and objective. The Directors note that any proposal to amend the investment policy and objective of the Company would require shareholder approval.

The Directors believe that such a potential proposal, if put forward, would be a significant change from the Company's current investment policy and objective, which was approved by more than 75% of those Shareholders voting at the EGM in October 2013 and which remains in place. The Board therefore remains committed to continue with the Company's current realisation strategy, in particular with respect to the lease negotiations at Curno and the property’s subsequent disposal.  The Company will also continue to make distributions at the earliest opportunity.

The negotiations with the tenant at Curno continue to progress. The Board and the Investment Manager do not believe it is in the Company’s interest to entertain a “forced sale” and believe that the new lease agreement will be beneficial to the disposal prospects of the property. It is anticipated that the new lease agreement will be finalised and in place before year-end.

At the same time and in view of the fact that plans for the significant cost savings identified in the Circular have been affected whilst the Company remains listed, the Board and its advisors will continue to review the Company’s ongoing operating cost structure to identify and implement expense reductions where possible

Further updates will be provided in due course.

Company website: retail.axa-im.co.uk/axa-property-trust

All Enquiries:

Investment Manager 
AXA Investment Managers UK Limited
Broker Services
7 Newgate Street
London EC1A 7NX
United Kingdom

Broker
Stifel Nicolaus Europe Limited
150 Cheapside
London EC2V 6ET
United Kingdom
Tel: [phone]

Company Secretary
Northern Trust International Fund
Administration Services (Guernsey) Limited
PO Box 255
Trafalgar Court
Les Banques
St Peter Port
Guernsey GY1 3QL

Channel Islands