Standard LifeInvProp Proposed portfolio acquisition and capital raising

 
TIDMSLI 
 
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS NOT FOR PUBLICATION, 
   RELEASE, OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN, OR INTO, THE UNITED 
STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, SOUTH AFRICA OR ANY JURISDICTION 
IN WHICH THE SAME WOULD BE UNLAWFUL. THE INFORMATION CONTAINED HEREIN DOES NOT 
  CONSTITUTE AN OFFER OF SECURITIES FOR SALE INCLUDING IN THE UNITED STATES, 
            AUSTRALIA, CANADA, JAPAN, NEW ZEALAND OR SOUTH AFRICA. 
 
            Standard Life Investments Property income Trust Limited 
                                (the "Company") 
 
     Proposed portfolio acquisition and capital raising (the "Proposals") 
 
                               28 September 2015 
 
Introduction and Portfolio 
 
The Board of the Company announces that it has entered into non-legally binding 
heads of terms to acquire a portfolio of 22 UK commercial properties (the 
"Portfolio") for a cash consideration of approximately GBP165 million.  The 
proposed Portfolio is diversified by sector, tenant and region and has a 
similar income and covenant profile to the Company's existing property 
portfolio.  The Company's investment manager believes that the proposed 
Portfolio is complementary to the existing portfolio and introduces a number of 
asset management opportunities that it believes will enhance returns to 
shareholders.  The proposed Portfolio is also expected to enhance the Company's 
dividend cover. 
 
The proposed acquisition of the Portfolio is subject to the completion of 
appropriate due diligence and valuations. It is expected that the Portfolio 
would be acquired by means of the purchase of all of the units in a Jersey 
Property Unit Trust which currently holds the Portfolio. 
 
Capital raising 
 
The acquisition is also subject to the Company raising additional equity and 
debt capital which, together with the Company's expected available cash 
reserves, would be used to fund the cash consideration and expenses of the 
acquisition.  The Board would intend to put in place a new debt facility for up 
to GBP75 million in aggregate and has commenced discussions with potential 
lenders in respect of these facilities.  The Board would also intend to 
undertake a placing of new ordinary shares at a premium to the net asset value 
per share to raise up to GBP100 million to fund the balance of the 
consideration. 
 
Consultation with Shareholders 
 
To date the Company has not incurred any material expenses in connection with 
the Proposals.  The acquisition of the Portfolio and the placing would be 
subject to Shareholder approval.  The Company's advisers will shortly be 
consulting with larger Shareholders in the Company in respect of the Proposals, 
including the level of possible demand for new ordinary shares under the 
proposed placing.  Subject to the outcome of that consultation it is expected 
that material costs will be incurred by the Company in the event that the 
Proposals do not proceed.  The Company's investment manager has agreed to make 
a contribution to part of those abortive costs. 
 
The Company will make a further announcement in due course in relation to the 
Proposals.  The Board notes that there is no certainty that the Proposals will 
proceed.  However, subject to the outcome of the legal and due diligence 
processes and the consultation with Shareholders, it is expected that a 
conditional contract could be exchanged in respect of the Portfolio, and a 
shareholder circular and prospectus published, within the next couple of months 
and that the placing and acquisition could complete by the end of the year. 
 
Dick Barfield, Chairman, commented: 
 
"The acquisition of this portfolio of properties identified by our investment 
manager presents an excellent opportunity to further diversify and grow the 
Company's property portfolio with properties which are complementary to the 
existing assets and introduce a number of asset management initiatives to 
enhance portfolio returns.  The acquisition would strengthen the Company's 
dividend cover and following a successful placing of new shares the liquidity 
in the Company shares should increase and make the Company more attractive to a 
wider audience of investors.  Whilst the transaction is at an early stage and 
remains subject to a number of conditions, we very much hope that shareholders 
will support the Proposals, including the proposed equity fund raising." 
 
All enquiries: 
 
Jason Baggaley/Gordon Humphries, Standard Life Investments 
Tel: [phone] 245 2735 
 
Graeme Caton, Winterflood Investment Trusts 
Tel: [phone] 
 
Douglas Armstrong, Dickson Minto W.S. 
Tel:  [phone] 
 
Winterflood Securities Limited, which is authorised and regulated by the 
Financial Conduct Authority, is acting for the Company and for no-one else in 
connection with the Proposals and will not be responsible to anyone other than 
the Company for providing the protections afforded to clients of Winterflood 
Securities Limited, or for affording advice in relation to the Proposals. 
 
Dickson Minto W.S., which is authorised and regulated by the Financial Conduct 
Authority, is acting for the Company and for no-one else in connection with the 
Proposals and will not be responsible to anyone other than the Company for 
providing the protections afforded to clients of Dickson Minto W.S., or for 
affording advice in relation to the contents of the Proposals. 
 
 
 
END 
 

(END) Dow Jones Newswires

September 28, 2015 02:00 ET (06:00 GMT)