Proposed Placing of New 2014 & 2016 ZDPs

RNS Number : 6746X

Utilico Investments Limited

20 February 2012

 



For immediate release on 20 February 2012

Utilico Investments Limited ("Utilico")

Utilico Finance Limited ("Utilico Finance")

(together the "Group")

Proposed Placing of new 2014 and 2016 ZDP Shares

Introduction

Further to the announcement on 20 January 2012, Utilico Finance announces today its intention to seek placing commitments for up to 10 million new 2014 ZDP Shares and up to 10 million new 2016 ZDP Shares (the "Issue") pursuant to the placing described in the prospectus published by Utilico Finance on 2 December 2011 (the "Prospectus").

Expected Timetable

	2012
Latest time for indications of interest	12:00 noon on Friday 2 March
Announcement of the result of the Issue	Friday 9 March
Admission of new ZDP Shares	Thursday 15 March

(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.

(3) If placing commitments are not received in respect of all the 2014 ZDP Shares and 2016 ZDP Shares available under the Issue by 2 March 2012, the Company may seek to place the remaining shares pursuant to a subsequent closing of the Placing prior to 1 December 2012.

Placing and Issue Statistics*

2016 ZDP Shares

2016 ZDP Share price as at 16 February 2012                                                                                 149.5p

Accrued Capital Entitlement per 2016 ZDP Share as at 16 February 2012                        138.68p

Final Capital Entitlement per 2016 ZDP Share                                                                            192.78p

Gross Redemption Yield (based on 2016 ZDP Share price as at 16 February 2012)         5.55%

ZDP Cover following the Issue                                                                                                               2.04x

2014 ZDP Shares

2014 ZDP Share price as at 16 February 2012                                                                                 149.0p

Accrued Capital Entitlement per 2014 ZDP Share as at 16 February 2012                        138.68p

Final Capital Entitlement per 2014 ZDP Share                                                                            167.60p

Gross Redemption Yield (based on 2014 ZDP Share price as at 16 February 2012)         4.45%

ZDP Cover following the Issue                                                                                                               3.18x

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

The Placing Price will be not less than the Accrued Capital Entitlement of the relevant class of existing ZDP Shares at the time of allotment and not more than the best offer price per the relevant class of existing ZDP Shares as quoted on the London Stock Exchange at the time the proposed allotment is agreed.

Illustrative financial effects of the Issue

By way of illustration and based upon the Assumptions, if 10 million 2014 ZDP Shares and 10 million 2016 ZDP Shares are issued pursuant to the Issue, the Group's Gross Assets would have been increased by the estimated gross proceeds of the Issue of £29.9 million, adjusted for the expenses in relation to the Issue estimated to be approximately £0.3 million.

By way of illustration and based upon the Assumptions, if 10 million 2014 ZDP Shares and 10 million 2016 ZDP Shares are issued pursuant to the Issue the illustrative ZDP Cover for the 2012 ZDP Shares, the 2014 ZDP Shares, the 2016 ZDP Shares and the 2018 ZDP Shares following the Issue would be 6.25x, 3.18x, 2.04x and 1.78x respectively.

This statement is unaudited and is solely for illustrative purposes only, represents a hypothetical situation and, therefore, does not reflect the Group's actual financial position or results.

Final Capital Entitlement

By way of illustration:

(i)           based on the Assumptions set out below, the Final Capital Entitlement of the 2012 ZDP Shares would have ZDP Cover of approximately 6.25x following completion of the Issue. Based on the Assumptions, if Utilico's Gross Assets were to fall by more than 84.0 per cent. during the period from 15 March 2012 (the anticipated date of completion of the Issue) 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 97.5 per cent. during this period and based on the Assumptions, would result in no payment being made to the 2012 ZDP Shareholders;

(ii)          based on the Assumptions set out below, the Final Capital Entitlement of the 2014 ZDP Shares would have ZDP Cover of approximately 3.18x following completion of the Issue. Based on the Assumptions, if Utilico's Gross Assets were to fall by more than 68.6 per cent., or by more than 35.7 per cent. per annum, during the period from 15 March 2012 (the anticipated date of completion of the Issue) 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 84.0 per cent. or by more than 50.2 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)        based on the Assumptions set out below, the Final Capital Entitlement of the 2016 ZDP Shares would have ZDP Cover of approximately 2.04x following completion of the Issue. Based on the Assumptions, if Utilico's Gross Assets were to fall by more than 50.9 per cent., or by more than 14.2 per cent. per annum, during the period from 15 March 2012 (the anticipated date of completion of the Issue) 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 68.6 per cent. or by more than 22.1 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)         based on the Assumptions set out below, the Final Capital Entitlement of the 2018 ZDP Shares would have ZDP Cover of approximately 1.78x following completion of the Issue. Based on the Assumptions, if Utilico's Gross Assets were to fall by more than 44.0 per cent., or by more than 8.4 per cent. per annum, during the period from 15 March 2012 (the anticipated date of completion of the Issue) 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 50.9 per cent. or by more than 10.2 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 statistics contained in this announcement relating to the ZDP Shares have been calculated on the following principal bases and assumptions:

●             As at 16 February 2012, there are 99,926,782 Ordinary Shares, 39,342,809 2012 ZDP Shares, 37,500,000 2014 ZDP Shares, 37,500,000 2016 ZDP Shares, 22,250,000 2018 ZDP Shares and 3,587,343 Utilico Warrants in issue;

●             The unaudited Gross Assets and Net Asset Value of Utilico as at 14 February 2012 were £487.1 million and £282.5 million respectively;

●             As at 14 February 2012, the Net Asset Value per Ordinary Share was 282.7p on an undiluted basis and 282.7p on a diluted basis;

●             The costs of the Issue are approximately £0.3 million (excluding VAT);

●             As at 14 February 2012, Utilico had outstanding bank debt of £12.8 million;

●             A total of 10,000,000 2014 ZDP Shares and 10,000,000 2016 ZDP Shares are issued pursuant to the Issue on 15 March 2012 and such ZDP Shares are issued at 149.0p and 149.5p respectively, being the respective mid-market prices as at 16 February 2012;

●             Gross proceeds of £29.9 million are raised pursuant to the Issue;

●             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;

●             No redemption, conversions or repurchases of any Ordinary Shares, ZDP Shares or Warrants are made prior to the redemption of the 2018 ZDP Shares.

Utilico Finance will publish a supplementary prospectus containing an update to certain information set out in the Prospectus in due course.

Terms used and not defined in this announcement bear the meaning given to them in the Prospectus dated 2 December 2011.

For further information please contact:

ICM Analysis & Research Ltd

Charles Jillings                                                                  01372 271486

Westhouse Securities Limited

Alastair Moreton/Hannah Young                              0207 601 6118

 

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