Public Service Properties Inv Ltd Correction:Compulsory Partial Redemption of Shares (0747C)

TIDMPSPI

RNS Number : 0747C

Public Service Properties Inv Ltd

23 June 2016

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

23 June 2016

Public Service Properties Investments Limited ("PSPI" or the "Company")

Compulsory Partial Redemption of approximately 22.5 million Shares

Further to its announcement released earlier today, the Company announces that references to the Record Date should be to 6.30pm on 6 July 2016 and the latest time and date for receipt of share certificates should be to 5.00pm on 6 July 2016. The amended announcement is set out below.

The amended dates set out above also apply to the Circular as defined below.

On 22 April 2016, the Company reported that the Board would consider making further distributions to shareholders following the return of GBP21.6 million in two transactions in 2015. The Board has now decided that the Company will use approximately GBP11.5 million(1) of its available cash balances to effect a redemption (the Redemption) through a mandatory purchase for cancellation of approximately 22.5 million shares (representing 99 per cent. of the Company's issued share capital) on a pro-rata basis at a price of 51.0p(2) (the Redemption Price) per ordinary share of the Company (Share) from shareholders of the Company (Shareholders) on the register at 6.30 p.m. on 6 July 2016 (the Record Date).

The Company is pleased to announce that a document (the Circular), setting out the formal notification to shareholders of the Redemption and the action (if any) which is required to be taken has been posted to Shareholders, and is available at www.pspiltd.com.

An extract from the Circular is set out below.

For further information please visit www.pspiltd.com or contact:

 
Dr. D. Srinivas        Tom Griffiths 
 Ralph Beney            Henry Willcocks 
 
 RP&C International     Stockdale Securities 
 (Asset Manager)        (Nomad and Broker) 
 020 7766 7000          020 7601 6100 
 

(1) Representing approximately 90% of the unaudited net asset value at 31 May 2016

(2) Being the closing market price of the Shares on 21 June 2016

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the contents of this document or the action you should take, you should seek your own advice from your stockbroker, solicitor, accountant or other professional adviser authorised under the Financial Services and Markets Act 2000.

The London Stock Exchange has not itself examined or approved the contents of this document. AIM is a market designed primarily for emerging or smaller companies to which a higher investment risk tends to be attached than to larger or more established companies. AIM securities are not admitted to the Official List and the AIM Rules for Companies are less demanding than those of the Official List.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

All times shown in this document are London times unless otherwise stated.

 
 Publication of the document                   22 June 2016 
--------------------------------  ------------------------- 
 Record date for Redemption           6.30pm on 6 July 2016 
--------------------------------  ------------------------- 
 Latest time and date for             5.00pm on 6 July 2016 
  receipt of share certificates* 
--------------------------------  ------------------------- 
 Shares marked "ex" Redemption,                 7 July 2016 
  new ISIN (ordinary shares 
  of USD 0.01 each) VGG729641511 
  effective, and CREST accounts 
  credited with 'balance' 
  Shares and redemption 
  proceeds 
--------------------------------  ------------------------- 
 Expected date for despatch        On or around 7 July 2016 
  of balance share certificates 
  and redemption proceeds 
  in respect of shares held 
  in certificated form* 
--------------------------------  ------------------------- 
 

*NOTE: If share certificates are not received on or before 6 July 2016, the redemptions will still be processed by reference to the share register on that date but despatch of the relevant redemption proceeds and balance certificate(s) will be delayed

   1      Introduction and Board changes 

In my statement in the Company's audited financial results for the year ended 31 December 2015, which were announced on 24 March 2016, I stated that the Board would consider further distributions to shareholders when the conditional disposal of the last remaining investment properties had been completed. On 22 April 2016, the Company announced that the relevant conditions of sale had been met and thus the transactions had closed enabling the Company to effect a redemption (the Redemption) through a mandatory purchase for cancellation of approximately 22.5 million shares (representing 99 per cent. of the Company's issued share capital) on a pro rata basis at a price of 51.0p per ordinary share of the Company (Share) being the closing price of the Shares on 21 June 2016 (being the last practicable date prior to the date of this document) from shareholders of the Company (Shareholders) on the register at 6.30pm on 6 July 2016 (the Record Date).

This document sets out the formal notification to Shareholders of the Redemption and the action which is required to be taken by Shareholders who hold their Share(s) in certificated form in order to receive the resultant consideration and a balance share certificate where applicable.

Given the substantially reduced size of the Company and its very limited activities following implementation of the Redemption, the decision has been taken to reduce the size of the Board. Jonas Rydell and Christopher Lovell have agreed to resign as Directors with effect from implementation of the Redemption. Richard Barnes, Neel Sahai and I will be remaining as Directors but we have all agreed to reduced fees with effect from 1 July 2016. I would like to thank Jonas and Christopher for the valuable contribution they have both made to the Group during their membership of the Board.

   2      The Redemption process 

The Redemption is being implemented by the Company pursuant to the Articles of Association of the Company as amended on 3 March 2015 (Articles). Under the Articles, the Board may, without further Shareholder approval, determine that Shares shall be redeemed pro rata from each Shareholder (or if the Board so determines as nearly pro rata as practical without giving rise to fractions of Shares).

The Company will use approximately GBP11.5 million of its available cash balances to mandatorily purchase for cancellation approximately 22.5 million Shares (representing 99 per cent. of the Company's current issued share capital) on a pro rata basis at a price of 51.0p per Share from Shareholders on the register on the Record Date.

Accordingly, the Company is redeeming 99 Shares for every 100 Shares held by Shareholders on the Record Date. No fractions of Shares will be redeemed and the number of Shares to be redeemed for each Shareholder and Depositary Interest Holder will be rounded down to the nearest whole number of Shares/Depositary Interests as appropriate. By way of example, if a Shareholder owns 100 Shares on the Record Date, 99 of their Shares will be redeemed and they will retain a holding of 1 Share.

All of the Shares redeemed pursuant to the Redemption will be cancelled.

The existing ISIN number VGG729641446 (Old ISIN) for the Shares will expire at 6.30 p.m. on the Record Date (6 July 2016). The new ISIN number VGG729641511 (New ISIN) in respect of the Shares (following the Redemption) will be enabled from 6 July 2016. Up to and including (6 July 2016), the Record Date, Shares will be traded under the Old ISIN. The Redemption will be effected pro rata to holdings of Shares and Depositary Interests on the register(s) at 6.30 p.m. on the Record Date. Purchases of Shares and Depositary Interests that are not reflected in the share register as at 6.30 p.m. on the Record Date will not be taken into account in implementing the redemptions.

Payments of redemption monies are expected to be effected: -

(i) in the case of Shares held in uncertificated form through Depositary Interests on 6 July 2016 through CREST; or

(ii) in the case of Shares held in certificated form, subject to delivery by the relevant Shareholder to the Company of the share certificate(s) in respect of the Shares to be redeemed by no later than 5.00pm on 6 July 2016, or as otherwise agreed by the Company, by cheque drawn in favour of the registered Shareholder and sent to the registered address of the registered Shareholder on or around 7 July 2016. A balance certificate for the remaining Shares held will at the same time be issued in the same name(s) as the Shareholder(s) whose Shares are redeemed and despatched together with a cheque for the redemption proceeds. All documentation sent pursuant to these arrangements is sent at the risk of the recipient. If share certificates are not received by the Company's registrars on or before 6 July 2016 in accordance with the instructions set out below in paragraph "4 Action to be taken - Shares held in certificated form", the Redemption will still be processed by reference to the share register on that date but despatch of the relevant redemption proceeds and balance certificate(s) will be delayed.

   3      Taxation treatment 

General treatment for UK tax paying Shareholders

The following summary of the UK tax treatment of Shareholders as result of redemption of part of their holding of Shares is intended as a general guide only and is based on United Kingdom tax law as well as the published practice of HMRC at the date of this document. It applies only to Shareholders who are resident in the UK (except where expressly stated) and who hold their Shares beneficially as an investment. It may not be applicable to certain Shareholders, such as investors who are exempt from UK tax or who hold Shares in an investment wrapper such as an ISA, dealers in securities and Shareholders who are not beneficial owners of the relevant Shares, such as trustees.

Shareholders who are in any doubt as to their tax position or who may be subject to tax in a jurisdiction other than the UK should consult an appropriate professional adviser. These comments are not exhaustive and do not constitute legal or tax advice.

Taxation of Chargeable Gains

A Shareholder whose Shares are redeemed should be treated, for the purposes of UK taxation of chargeable gains, as though he had sold them on-market to a third party at the Redemption Price per Share redeemed. A charge to capital gains tax or, in the case of a corporate Shareholder, corporation tax on chargeable gains could therefore arise depending on that Shareholder's particular circumstances (including the availability of any exemptions, reliefs and allowable losses).

A Shareholder who is not resident for tax purposes in the UK whose Shares are redeemed pursuant to the Redemption will not normally be liable for UK taxation on chargeable gains on any gain which is

realised. However, a liability to tax may arise in respect of a gain if such Shares are held for the purposes of a trade, profession or vocation in the UK through a branch or agency (or, in the case of a corporate Shareholder, a permanent establishment) or realised by an individual Shareholder who is temporarily non-resident who may be liable to capital gains tax under certain anti-avoidance rules, which can impose taxation when the non-resident returns to the United Kingdom.

The attention of investors is drawn to section 684 of the Income Tax Act 2007 (ITA) (for individuals) and section 731 of the Corporation Taxes Act 2010 (CTA) (for companies) under which HM Revenue & Customs may seek to cancel tax advantages from certain transactions in securities. No application for clearance under section 701 of the ITA or section 748 of the CTA has been made. In the event that HM Revenue & Customs did successfully apply section 684 of the ITA (and associated provisions) or section 731 of the CTA (and associated provisions) to payments in respect of the Redemption, HM Revenue & Customs might make such tax assessment on any of the Shareholders as they consider necessary in the circumstances, including the Shareholders as having received any payment as an income receipt.

Individual Shareholders - taxation of income

The redemption of Shares pursuant to the Redemption will not constitute a distribution for any Shareholder who is an individual provided the Company is, as is intended, not UK tax resident.

Corporate Shareholders - taxation of income

The Company has been advised that payments to Shareholders (to the extent that the payments represent repayment of capital and any premium payable on issue of the Shares constituting new consideration) in respect of the Redemption should not constitute income distributions for UK tax purposes.

To the extent that the Redemption Price exceeds the original subscription capital provided for the Shares, such amount may be treated as an income distribution (and excluded from the chargeable gains computation). However, generally any such distributions should be exempt from a charge to corporation tax on income and the tax treatment of this distribution will be as set out below. However, the tax treatment of the distribution element paid by the Company in respect of the Shares will depend upon the size of the recipient company - any corporate Shareholder which is not "small" will generally be exempt from corporation tax on income on the distribution element.

Certain small companies will be taxed at their marginal rate of corporation tax on all dividends and distributions, including the distribution element of the Redemption Price, received from the Company. In appropriate circumstances, a tax credit should also be given for any underlying tax that is paid on the profits out of which the dividend was paid, provided the relevant corporate Shareholder controls at least 10 per cent. of the voting rights in the Company and certain detailed conditions are satisfied. Corporate Shareholders should seek their own separate advice as to whether they are a small company for these purposes.

Corporate Shareholders - taxation of chargeable gains

Shareholders within the charge to UK corporation tax may be subject to corporation tax on chargeable

gains in respect of any gain arising on a disposal of Shares. Indexation allowance may apply to reduce any chargeable gain arising on a disposal of the Shares pursuant to the Redemption but will not create or increase an allowable loss.

Corporate Shareholders should take their own advice regarding the chargeable gains implications of the Redemption but, broadly, (a) where an amount treated as a distribution is taxable as income, this amount should be excluded from the computation of the chargeable gain and (b) where it is exempt, the distribution should be included in the disposal proceeds for the purposes of the computation of the

chargeable gain.

Offshore funds

The Company has been advised that it should not be regarded as a mutual fund for the purposes of section 356 Taxation (International and Other Provisions) Act 2010. On this basis a shareholding in the Company should not be regarded as a relevant interest in an offshore fund for tax purposes.

Stamp duty and stamp duty reserve tax

Shareholders will have no liability to UK stamp duty or stamp duty reserve tax in respect of the redemption of their Shares.

This information is provided for general guidance only. The tax treatment of the Redemption for particular Shareholders may depend on their particular circumstances. Any Shareholder who is uncertain as to the taxation treatment of redemption of their Shares should obtain appropriate specialist advice.

   4      Action to be taken 

Depositary Interest Holders

No action is required to be taken by Depositary Interest Holders. At 6.30 p.m. on the Record Date, the Old ISIN will be disabled and on 7 July 2016, holders will receive the new Depositary Interest under ISIN VGG729641511. Redemption proceeds due will be settled through CREST by means of a CREST payment in favour of the holder's payment bank in respect of the cash proceeds due, in accordance with CREST payment arrangements. The Company reserves the right to settle all or any part of the proceeds referred to in this paragraph, in the manner referred to in paragraph 2(ii) above, if, for any reason, it wishes to do so.

Shares held in certificated form

In order to receive payment for the redeemed Shares and the balance share certificate(s) for Shares remaining in issue, Shareholders should return to the Company's registrars the share certificate(s) for the Shares to be redeemed by no later than 5.00 p.m. on 6 July 2016, or where any relevant share certificate has been lost, a form of indemnity (and other applicable documentation if required) duly completed and signed and returned in accordance with the instructions printed thereon to Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY.

If your completed documentation is not received by 5.00 p.m. on 6 July 2016, this will delay receipt of the relevant holder's redemption consideration and issue of the share certificate(s) for the remaining Shares.

If you have any questions about this process or cannot locate your Share certificate(s) and need to execute a form of indemnity you should contact Computershare on 0370 707 1438 if calling from the UK or [phone] if calling from outside the UK. The helpline is available between the hours of 9.00am and 5.00pm excluding weekends and public holidays, calls may be recorded and monitored randomly for security and training purposes. The Registrar cannot provide advice on the merits of the transaction nor give any financial, legal or tax advice. If you are a CREST sponsored member, you should contact your CREST sponsor before taking any action.

Where a holding of a registered Shareholder or the same multiple Shareholders is represented by one or more Share Certificate(s), (i) this will be treated as a single holding for the purposes of determining the number of Shares to be redeemed, and (ii) it will only be necessary to surrender (a) Share certificate(s) representing the number of Shares to be redeemed. The number of Shares represented by any balance certificate will take into account the number of Shares represented by retained certificates.

A balance share certificate representing the retained shares and a cheque for payment of the redemption proceeds (on the basis described above) will be issued on or around 7 July 2016.

   5      Further payments to Shareholders 

Following completion of the Redemption, the Board will continue to keep under review the return of remaining funds to Shareholders subject to provision for the Group's contingent and actual liabilities. Such provision includes warranties given in respect of the various sale transactions in the UK and Germany although no claims are expected to arise and the majority of the warranties are due to expire during the course of 2016.

Yours sincerely

Patrick Hall

Chairman

This information is provided by RNS

The company news service from the London Stock Exchange

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June 23, 2016 05:21 ET (09:21 GMT)