Eastern European Property Fund Ltd Proposed cancellation of admission (9788G)

TIDMEEP

RNS Number : 9788G

Eastern European Property Fund Ltd

07 March 2018

FOR IMMEDIATE RELEASE

7 March 2018

Eastern European Property Fund Limited

Proposed cancellation of admission to trading and notice of Extraordinary General Meeting

The Board of Eastern European Property Fund Limited (AIM: EEP) announces the Company's proposed cancellation from trading on AIM (the "Cancellation").

As previously announced by the Company on 19 December 2017, the Directors have concluded that it is in the best interests of the Company and its Shareholders to cancel the admission of the Ordinary Shares to trading on AIM.

The Company will shortly post to its shareholders a circular (the "Circular") in connection with the Cancellation containing a notice convening an extraordinary general meeting of the Company (the "Extraordinary General Meeting") to be held at 11.00 a.m. on 29 March 2018 at 1st Floor, Royal Chambers, St Julian's Avenue, St Peter Port, Guernsey, GY1 3JX.

Any shareholders wishing to discuss the Company's future with the Chairman, the Management Team or with Liberum Capital, as the Company's Nominated Adviser and Broker, are invited to contact Liberum Capital in the first instance.

Subject to the Resolution being passed at the Extraordinary General Meeting, the expected last day of dealings in Ordinary Shares on AIM will be 9 April 2018 and the Cancellation will become effective at 7.00 a.m. on 10 April 2018. Pursuant to Rule 41 of the AIM Rules, the Company, through Liberum Capital, has notified the London Stock Exchange of the proposed Cancellation.

The above summary should be read in conjunction with the full text of this announcement and the Circular. Extracts from the Circular, which sets out the background to and reasons for the Company seeking Cancellation, are set out below and a copy of the Circular will shortly be available on the Company's website http://www.eepfl.com.

Defined terms used in this announcement have the meaning set out at the end of this announcement and as in the Circular.

For further information:

Contacts

 
 Elysium Fund Management               Gillian Martin (Nominated 
  Limited                               Adviser) 
  1(st) Floor, Royal                    Henry Freeman 
  Chambers                              Liberum Capital 
  St Julian's Avenue                    Ropemaker Place, 
  St Peter Port                         Level 12 
  Guernsey                              25 Ropemaker Street 
  GY1 3JX                               London 
                                        EC2Y 9LY 
 Tel: [phone]                  Tel: [phone] 
                                        2000 
  E-mail: [e-mail]   E-mail: [e-mail] 
 EEP website: www.eepfl.com            Liberum website: 
                                        www.liberum.com 
 

EXTRACTS FROM THE CIRCULAR

The following has been extracted without amendment from, and should be read in conjunction with, the Circular to Shareholders dated 7 March 2018, which will be available shortly from the Company's website: http://www.eepfl.com.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

 
                                                        2018 
 Publication and posting of this                     7 March 
  document and Form of Proxy to Shareholders 
 Latest time and date for receipt              11.00 a.m. on 
  of completed Forms of Proxy in respect            27 March 
  of the Extraordinary General Meeting 
 Time and date of the Extraordinary            11.00 a.m. on 
  General Meeting                                   29 March 
 March Expected last day of dealings                 9 April 
  in Ordinary Shares on AIM 
 Expected time and date of the Cancellation     7.00 a.m. on 
                                                    10 April 
 

Notes

(1) All of the times referred to in this document refer to London times, unless otherwise stated. Each of the times and dates in the above timetable is subject to change. If any of the above times and/or dates change, the revised times and dates will be notified to Shareholders by an announcement through a Regulatory Information Service.

(2) The Cancellation requires the approval of not less than 75 per cent. of the votes cast by Shareholders at the Extraordinary General Meeting.

LETTER FROM THE CHAIRMAN

7 March 2018

Dear Shareholder,

Proposed cancellation of admission of Ordinary Shares to trading on AIM, restructuring of the management fee, reduction of the administration fee and Notice of Extraordinary General Meeting

   1.    Introduction 

The Company announced on 19 December 2017 that the Directors have concluded that it is in the best interests of the Company and its Shareholders to cancel the admission of the Ordinary Shares to trading on AIM.

Pursuant to Rule 41 of the AIM Rules, the Cancellation is conditional on the approval of not less than 75 per cent. of the votes cast by Shareholders (whether present in person or by proxy) at the Extraordinary General Meeting, notice of which is set out in Part 2 of this document.

If the Resolution is passed at the Extraordinary General Meeting, it is anticipated that the Cancellation will become effective at 7.00 a.m. on 10 April 2018.

The purpose of this document is to seek Shareholders' approval for the Resolution; to provide you with the information on the background and reasons for the Cancellation; and to explain the consequences of the Cancellation and why the Directors unanimously consider the Cancellation and the associated proposals contained in this document to be in the best interests of the Company and its Shareholders as a whole.

   2.    Background to and reasons for the Cancellation 

The Directors have conducted a review of the benefits and drawbacks to the Company and its Shareholders of retaining its quotation on AIM and believe that Cancellation is in the best interests of the Company and its Shareholders as a whole. In reaching this conclusion, the Directors have considered the following key factors:

-- The current investment objective and policy of the Company is to carry out an orderly realisation of its remaining assets, distribute the net proceeds to Shareholders and then undertake a voluntary winding-up of the Company. The Board remains committed to achieving this objective. The Company has only two remaining properties, which continue to be marketed for sale: Markiz Passage in Istanbul and 24 George Washington Street in Sofia. The Manager, the Property Manager and the Investment Advisers believe that as a private company, negotiations with potential buyers will be more discreet and should lead to more meaningful and attractive offers as: (i) compliance with the Company's public company disclosure requirements around realisation and strategy; and (ii) the divergence between the market value of the Ordinary Shares and the net asset value of the Company, will no longer be factors in negotiating asset disposals. An update on the properties, the market conditions and the sales process is set out in paragraph 3 below.

-- The considerable cost, management time and the legal and regulatory burden associated with maintaining the Company's admission to trading on AIM are, in the Directors' opinion, disproportionate to the benefits to the Company and to the maximisation of Shareholder value. The Directors are cognisant of the level of the Company's operating costs relative to the progress being made with regard to asset disposals. In addition to seeking the Cancellation, which will deliver direct cost savings for the Company from there being no further obligation to pay London Stock Exchange or nominated adviser fees, the following proposals are expected to lead to additional cost savings and/or working capital improvements:

(i) the restructuring of the management fee and the reduction of the administration fee payable by the Company, including the deferral of most of the management fee until after the sale of the Markiz Passage so as to be paid on a realisation basis;

(ii) a change to the composition of the Board and the deferral of a portion of the Directors' fees until after the sale of the Markiz Passage; and

(iii) the Company's intention that following the Cancellation it will no longer produce and publish half- yearly reports and financial statements.

The Manager estimates that the annual cost savings and working capital improvements following the Cancellation and the other changes outlined above will amount to, in aggregate, approximately GBP285,000. As a result of the cost savings that will result following the Cancellation, the Company is expected to maintain sufficient working capital for a longer period of time in which to seek potential buyers and negotiate sales of the assets at prices which would seek to maximise value for Shareholders.

Further details of the restructuring of the management fee, the reduction of the administration fee and change to the composition of the Board and to the remuneration of the Directors following the Cancellation are set out in paragraphs 6 and 7 below.

   3.    Update on the properties, the market conditions and sales process 

At the date of this document, the Company owns two properties, located in Istanbul, Turkey and in Sofia, Bulgaria. According to the Company's most recent published half-yearly report and financial statements for the six month period ended 30 June 2017, the Company's freehold investment properties in Turkey and Bulgaria had a combined valuation of GBP12.2 million.

Markiz Passage, Istiklal Street, Beyoglu, Istanbul, Turkey

The Markiz Passage is a historical property first constructed in the 1840s comprising 5,500 square metres of floor space with vacant possession, located on a corner of Istiklal Street, a prime shopping street in Beyoglu in central Istanbul. The Company acquired the property in 2006 through a wholly owned purpose-formed subsidiary incorporated in Turkey.

Since acquisition, various strategies have been implemented by the Property Manager and the Investment Adviser (Turkey) in an endeavour to realise value from the Markiz Passage. Although the strategies elicited many expressions of interest from buyers and brokers, to date, no acceptable cash offer for the property or the Company's Turkish subsidiary has been received. For a number of years, the sales process has been negatively affected by poor investor sentiment resulting from the civil war in Syria, which shares an 822 kilometre land border with Turkey; the subsequent influx into Turkey of refugees from Syria; recent terrorist attacks in Istanbul beginning in 2015; and the attempted military coup in 2016 which resulted in the ongoing state of emergency.

Once peace gradually returns and the unrest in Syria and Turkey diminishes, the Property Manager and the Investment Adviser (Turkey) expect that the demand for prime real estate in Istanbul will increase. Recent improvements to local infrastructure continue to be made in the area around the Markiz Passage. The Property Manager and the Investment Adviser (Turkey) expect these factors will gradually enhance the attraction of the Markiz Passage to potential buyers.

Besides a sale of the Markiz Passage or the Turkish subsidiary, the Property Manager and the Investment Adviser (Turkey) are also seeking an anchor tenant for the property which, if implemented, would require certain capital works to be completed, most or all at the cost of the Company. Income from an anchor tenant could facilitate a sale of the asset.

George Washington Street, Sofia, Bulgaria

The property owned by the Company located on George Washington Street in Sofia, is a redevelopment completed in 2008. The property comprises 3,685 square metres of leasable floor space plus 566 square metres of parking, located adjacent to the city centre and very close to the central station on the Sofia Metro, Serdica. The building provides primarily office space accommodation and features a climate-controlled atrium together with six individual roof gardens.

Since acquisition, the Property Manager and the Investment Adviser (Bulgaria) have sought to realise value from the property. However, months after the building was completed and while occupancy was rising, investor sentiment in real estate in Sofia turned sharply negative, caused principally by the economic downturn following the 2008-9 international financial crisis. Although property prices and liquidity in Sofia stagnated during the prolonged political and economic hiatus that ensued, a significant portion of the property was successfully re-leased to one of the country's leading banks. With limited availability of finance for investors to acquire real estate, few serious expressions of interest were received to purchase the property until 2017.

The main commercial real estate agents in Sofia have recently reported to the Property Manager and the Investment Adviser (Bulgaria) a significant improvement in the local rental market and they are confident about the prospects to re-let and/or achieve a sale of the asset after the bank terminates its lease in March 2018. A revised non-binding indicative offer has recently been received for the purchase of the property on terms broadly acceptable to the Company. Although there is no assurance that a sale of the asset will result from this or other future potential offers, the Property Manager and the Investment Adviser (Bulgaria) are optimistic that a sale of the asset will materialise during 2018.

   4.    Principal effects of the Cancellation 

The Directors are aware that certain Shareholders may be unable or unwilling to hold Ordinary Shares following the Cancellation. Such Shareholders should consider selling their interests in the market prior to the Cancellation.

The principal effects of the Cancellation include:

-- There will be no formal market mechanism enabling the Shareholders to trade Ordinary Shares and, other than the proposed Matched Bargain Facility referred to in paragraph 5 below, no other recognised market or trading facility is intended to be put in place to facilitate the trading of the Ordinary Shares.

-- While the Ordinary Shares will remain freely transferrable, it is likely that the liquidity and marketability of the Ordinary Shares will, in the future, be significantly reduced and the secondary market value of the Ordinary Shares may be adversely affected as a consequence.

-- In the absence of a formal market and quote, it will be more difficult for Shareholders to determine the market value of their investment in the Company at any given time. There is no guarantee that: Shareholders will be able to realise their investment prior to the winding-up of the Company; of the future value of the Company's remaining assets; or of the price at which Ordinary Shares may be bought or sold. The price at which Ordinary Shares may be bought or sold in future pursuant to the Matched Bargain Facility will not be made public.

-- The regulatory and financial reporting regime applicable to companies whose shares are admitted to trading on AIM will no longer apply to the Company. Shareholders will no longer be afforded the protections given by the AIM Rules and the Market Abuse Regulation, such as the requirement to be notified of certain events, or to vote on certain substantial transactions. In particular, the Company will not be bound to make any public announcements of material events, or to announce financial results, although, following the Cancellation, the Company will continue to maintain its website, through which it will make available its annual financial statements and certain other information.

-- In order to increase the cost saving of becoming a private company, following the Cancellation, the Company will no longer produce and publish half-yearly reports and financial statements. Shareholders should be aware that in voting in favour of the Resolution they will also, in effect, be voting in favour of this policy.

-- The levels of transparency and corporate governance will not be equivalent to those for a company quoted on AIM.

   --           The Company will cease to have an independent nominated adviser and broker. 

-- Whilst the Company's CREST facility will remain in place immediately following the Cancellation, the Company's CREST facility may, if the Board so determines, be cancelled in the future in order to save the associated costs. Although under such circumstances the Ordinary Shares will remain transferable, they will cease to be transferable through CREST. In this instance, Shareholders who hold Ordinary Shares in CREST will receive share certificates.

-- The Cancellation may have taxation consequences for Shareholders. Shareholders who are in any doubt about their tax position should consult their own professional independent tax adviser.

The above considerations are not exhaustive and Shareholders should seek their own independent advice when assessing the likely impact of the Cancellation on them.

If Shareholders wish to buy or sell Ordinary Shares on AIM they must do so prior to the Cancellation. If Shareholders approve the Cancellation, it is anticipated that the last day of dealings in the Ordinary Shares on AIM will be 9 April 2018 and that the effective date of the Cancellation will be 10 April 2018. The Board is not making any recommendation as to whether or not Shareholders should buy or sell their Ordinary Shares.

   5.    Transaction in the Ordinary Shares following the Cancellation 

The Board is aware that following the Cancellation, it will be more difficult for Shareholders to buy and sell Ordinary Shares.

Elysium will make arrangements to provide a Matched Bargain Facility, to assist Shareholders to trade in the Ordinary Shares, to be put in place following the Cancellation. Under the Matched Bargain Facility, Shareholders wishing to acquire or dispose of Ordinary Shares will be able to leave an indication with Elysium, through their stockbroker (Elysium is unable to deal directly with members of the public), of the number of Ordinary Shares that they are prepared to buy or sell at an agreed price. In the event that sell and buy instructions can be matched, Elysium will contact both parties (via their stockbrokers) and then effect the bargain. In the event that the Cancellation becomes effective, details of the Matched Bargain Facility will be made available to Shareholders on the Company's website www.eepfl.com. Where necessary in order to comply with Guernsey regulatory requirements, Elysium will conduct anti-money laundering checks, in respect of which an administration charge will be levied by Elysium on the buyer and/or seller as appropriate (in either case via their stockbroker).

Shareholders should note that there can be no guarantee that orders for the disposal or acquisition of Ordinary Shares will be capable of being matched using the Matched Bargain Facility which will be provided at the sole discretion of Elysium. The Board is not making any recommendation as to whether or not Shareholders should buy or sell their Ordinary Shares and the Company will not act as an intermediary in relation to the provision of the Matched Bargain Facility. If Shareholders wish to buy or sell Ordinary Shares on AIM they must do so prior to the Cancellation.

   6.    Board composition, Directors' fees and corporate governance following Cancellation 

In the event that the Resolution is passed and the Cancellation becomes effective, Hugh Ward has indicated his intention to resign from the Board. The remaining Directors, Martin Adams and Carol Goodwin, have, conditional on the Cancellation, agreed to defer 50 per cent. of their annual remuneration to improve the working capital position of the Company and to better align their interests with those of Shareholders. Any deferred remuneration will be paid on a return of cash (by way of dividend or otherwise) to Shareholders following completion of the sale of the Markiz Passage.

Notwithstanding the Cancellation, Shareholders should note that the Takeover Code will continue to apply to the Company following the Cancellation for a period of 10 years from the Cancellation. Although the Takeover Code will continue to apply to the Company, certain Shareholders hold a significant percentage of the current issued share capital and may seek to exert increased influence over the Company.

Following the Cancellation, the Board will make annual financial statements available to all Shareholders, and intends to maintain the Company's website www.eepfl.com to provide information on significant events and developments relating to the Company, although there will be no obligation on the Company to include all of the information required under AIM Rule 26 or to update the website as required by the AIM Rules. The Board intends that access to the website will, following the Cancellation, become password protected.

Following Cancellation, the Company, being a Guernsey authorised closed-ended investment company, will remain authorised by the GFSC and will continue to comply with the Finance Sector Code on Corporate Governance issued by the GFSC. The Board will maintain appropriate corporate governance and oversight over the Company's operations. The Company will also remain subject to the provisions of its memorandum and articles of incorporation pursuant to which Shareholder approval is required for certain matters.

   7.    Restructuring of the management fee and reduction of the administration fee 

The Company has agreed with the Manager and the Administrator respectively that, subject to and with effect from Cancellation, the management fee shall be restructured and the administration fee shall be reduced to improve the working capital position of the Company.

Management fee

Under the Management Agreement, the Manager is currently entitled to receive a management fee at the annual rate of 1.25 per cent. of total assets, payable quarterly in advance. The Property Manager and the Investment Advisers receive a proportion of this fee. A performance fee may also be payable to the Manager on the occurrence of certain events, including following a sale of substantially all of the Company's assets. In order to improve the working capital position of the Company, the Manager, the Property Manager and the Investment Advisers have agreed to a reduction of the annual management fee payable by 62.5 per cent., such that the new management fee will be 0.47 per cent. per annum of total assets. The Company has also agreed with the Manager that the existing performance fee arrangements contained in the Management Agreement will be waived.

In consideration for the reduction in the annual management fee, and for the waiver of the existing performance fee arrangements, the Company has instead agreed to remunerate the Manager on a realisation basis by paying the Manager a percentage of the total distribution (by way of dividend or otherwise) to Shareholders following any asset sales (the "Realisation Fee").

The relevant percentage payable will depend on the time period following the effective date of the Cancellation in which cash is distributed to Shareholders (by way of dividend or otherwise) following the sale of an asset, with an incentive to distribute cash earlier and will be as follows:

-- Under 18 months following Cancellation, the amount of the Realisation Fee shall be equal to the amount which is 6 per cent. of the total distribution to Shareholders; or

-- Between 18 months and three years following Cancellation, the Realisation Fee shall be equal to the amount which is 5 per cent. of the total distribution to Shareholders; or

-- Later than three years following Cancellation, the Realisation Fee shall be equal to the amount which is 4 per cent. of the total distribution to Shareholders.

The restructuring of the management fee (which includes both the reduction of the annual management fee and the introduction of the new Realisation Fee) is intended to better align the interests of the Manager, the Property Manager and the Investment Advisers with those of Shareholders to realise the assets in a timely manner whilst seeking to maximise value. All management fees payable to the Property Manager and the Investment Advisers will remain payable out of the fees paid to the Manager by the Company.

The restructuring of the management fee does not amend the agreement the Company has with each of the Investment Advisers to pay sales commissions upon the sale of assets. As disclosed in the Company's half- yearly report and financial statements for the six month period ended 30 June 2017, the Company has agreed:

-- If a third party agent is involved in the sale of the property in Sofia, to pay an aggregate commission of 2 per cent. of the sale proceeds, with 1.5 per cent. payable to the third party agent and 0.5 per cent. to the Investment Adviser (Bulgaria). If the sale of the property in Sofia is executed solely by the Investment Adviser (Bulgaria), the commission payable will be 1.5 per cent. of the sale proceeds, payable to the Investment Adviser (Bulgaria).

-- If a third party agent is involved in the sale of the property in Istanbul, to pay an aggregate commission of 2 per cent. of the sale proceeds, with 1.5 per cent. payable to the third party agent and 0.5 per cent. to the Investment Adviser (Turkey). If the sale of the property in Istanbul is executed solely by the Investment Adviser (Turkey), the commission payable will be 1.5 per cent. of the sale proceeds, payable to the Investment Adviser (Turkey).

Administration fee

Under the Administration Agreement, the Administrator is currently entitled to receive an administration fee at the annual rate of 0.1 per cent. of gross assets, subject to a minimum annual fee of GBP100,000. The Company has agreed with the Administrator that the administration fee will be reduced such that the new administration fee will be 0.1 per cent. per annum of gross assets, subject to a minimum annual fee of GBP25,000 (being in effect a 75 per cent. reduction).

In the event that the Markiz Passage is sold within six months of the effective date of Cancellation, the terms of the management fee, performance fee and administration fee as at the date of this document will be reinstated and the Manager and the Administrator will be entitled to receive payment of any management fees, performance fees and administration fees on the current basis (adjusted to: (i) take account of any Realisation Fee that may have already been paid; and (ii) include a catch-up payment of any management fees and administration fees that would have been payable to the Manager and the Administrator since the Cancellation).

The Directors consider, having consulted with the Company's Nominated Adviser, that the terms of the restructuring of the management fee and the reduction of the administration fee are fair and reasonable insofar as the Company's shareholders are concerned.

   8.    Effect on the Company should the Cancellation not be approved 

In the event that the Resolution is not passed and the Cancellation is not approved, the Company's AIM quotation will be maintained and it will be unable to deliver the annual cost savings and working capital improvements referred to above. In addition, the proposed restructuring of the management fee, the reduction of the administration fee, the change in the Board composition and the change in Directors' fees will not take effect. There is a risk that, should the Cancellation not be approved, the Company may exhaust its working capital before it is able to dispose of its remaining assets.

   9.    Process for Cancellation 

Under the AIM Rules, it is a requirement that the Cancellation must be approved by not less than 75 per cent. of votes cast by Shareholders at an Extraordinary General Meeting. Accordingly, the Notice of Extraordinary General Meeting set out in Part 2 of this document contains a special resolution to approve the Cancellation.

Furthermore, Rule 41 of the AIM Rules requires any AIM company that wishes the London Stock Exchange to cancel the admission of its shares to trading on AIM to notify shareholders and to separately inform the London Stock Exchange of its preferred cancellation date at least 20 Business Days prior to such date. Additionally, Cancellation will not take effect until at least 5 clear Business Days have passed following the passing of the Resolution.

In accordance with AIM Rule 41, the Company (via its nominated adviser) has notified the London Stock Exchange of the Company's intention, conditional on the Resolution being passed at the Extraordinary General Meeting, to cancel the Company's admission of the Ordinary Shares to trading on AIM on 10 April 2018. If the Resolution is passed, the Cancellation will become effective at 7.00 a.m. on 10 April 2018. After the Cancellation, Liberum Capital Limited will cease to be the nominated adviser of the Company and the Company will no longer be required to comply with the AIM Rules.

10. Action to be taken

Enclosed with this document is a Form of Proxy for use at the Extraordinary General Meeting. Whether or not you propose to attend the Extraordinary General Meeting in person, you are requested to complete and return the Form of Proxy to the Company's registered office, 1st Floor, Royal Chambers, St Julian's Avenue, St Peter Port, Guernsey GY1 3JX, in accordance with the instructions printed thereon as soon as possible and, in any event, by no later than 11.00 a.m. on 27 March 2018. Completion and return of a Form of Proxy will not preclude you from attending and voting at the Extraordinary General Meeting in person if you so wish.

11. Recommendation

The Directors consider that the Cancellation and the annual cost savings and working capital improvements resulting from the changes described in this document are in the best interests of the Company and its Shareholders as a whole and therefore unanimously recommend that you vote in favour of the Resolution, as the Directors intend to do in respect of their own beneficial holdings of Ordinary Shares amounting, in aggregate, to 240,000 Ordinary Shares (representing approximately 1.55 per cent. of the Ordinary Shares in issue at the date of this document).

Yours faithfully,

Martin Adams

Chairman

DEFINITIONS

The following definitions apply throughout this document, unless the context requires otherwise:

   "Administration                  the agreement dated 15 March 2006, as amended, between the Company 
   Agreement"                       and the Administrator 
   "AIM"                                 AIM, the market operated by the London Stock Exchange 

"AIM Rules" the rules and guidance for companies whose shares are admitted to trading on AIM entitled "AIM Rules for Companies" published by the London Stock Exchange, as amended from time to time

"Business Day" a day (excluding Saturday, Sunday and public holidays in England) on which banks are generally open for business in London for the transaction of normal banking business

"Cancellation" the cancellation of admission of the Ordinary Shares to trading on AIM, conditional on the passing of the Resolution and in accordance with Rule 41 of the AIM Rules

"Company" Eastern European Property Fund Limited, a company incorporated in Guernsey with registered number 44424

"CREST" the relevant system (as defined in the CREST Regulations) in respect of which Euroclear is the operator (as defined in those regulations)

"CREST Regulations" the Uncertificated Securities Regulations 2001 (as amended from time to time) and such other regulations as are applicable to CREST from time to time

"Directors" or "Board" the directors of the Company, whose names are set out on page 5 of this document

"Extraordinary the Extraordinary General Meeting of the Company convened for 11.00

General Meeting" a.m. on 29 March 2018 and any adjournment thereof, notice of which is set out at the end of this document

"Form of Proxy" the form of proxy enclosed with this document for use at the Extraordinary General Meeting or at any adjournment thereof

   "GFSC"                              Guernsey Financial Services Commission 
   "Investment Adviser           Walnut Investments OOD 

(Bulgaria)"

   "Investment Adviser           Pera Pera Yönetim ve Dani manlik Hizmetleri ve Tic Limited 

(Turkey)"

"Investment Advisers" together the Investment Adviser (Bulgaria) and the Investment Adviser (Turkey)

   "London Stock                   London Stock Exchange plc 

Exchange"

   "Management                    the agreement dated 1 January 2011 between the Company, the Manager 
   Agreement"                       and the Property Manager 
   "Manager" or                     Elysium Fund Management Limited 

"Administrator" or "Elysium"

   "Market Abuse                   Regulation (EU) No. 596/2014 of the European Parliament and of the 
   Regulation"                       Council of 16 April 2014 on market abuse 
   "Matched Bargain              the matched bargain trading facility to be put in place following the 

Facility" Cancellation, conditional on the passing of the Resolution, as described in paragraph 5 of Part 1 of this document

"Notice of Extraordinary the notice of Extraordinary General Meeting which is set out in Part 2 of

   General Meeting" or          this document 

"Notice"

"Ordinary Shares" ordinary shares of one penny each in the capital of the Company, and "Ordinary Share" means any one of them

   "Property Manager"          CNC Property Fund Management Limited 

"Realisation Fee" has the meaning given to it in paragraph 7 of Part 1 of this document

   "Regulatory Information    has the meaning given to it in the AIM Rules 

Service"

"Resolution" the resolution to be proposed at the Extraordinary General Meeting in the form set out in the Notice of Extraordinary General Meeting

"Shareholders" holders of Ordinary Shares from time to time and "Shareholder" means any one of them

   "Takeover Code"                the City Code on Takeovers and Mergers 
   "United Kingdom"              the United Kingdom of Great Britain and Northern Ireland 

This information is provided by RNS

The company news service from the London Stock Exchange

END

MSCLLFFLVVIDIIT

(END) Dow Jones Newswires

March 07, 2018 07:00 ET (12:00 GMT)