Globalworth Real Estate Inv Ltd Publication of Circular and Notice of EGM (6613S)

TIDMGWI

RNS Number : 6613S

Globalworth Real Estate Inv Ltd

12 March 2019

The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this information is considered to be in the public domain.

12 March 2019

Globalworth Real Estate Investments Limited

("Globalworth" or the "Company")

Publication of Circular and Notice of EGM

Globalworth, the leading office investor in Central and Eastern Europe, announces that an Extraordinary General Meeting ("EGM") of the Company will be held at 11.00 a.m. on 29 March 2019 at Ground Floor, Dorey Court, Admiral Park, St Peter Port, Guernsey, GY1 2HT. This follows the Company's announcement on 11 March 2019, in conjunction with its preliminary financial results for the year ended 31 December 2018, of its intention to raise up to EUR500 million additional equity capital through the issue of new Shares in the capital of the Company (the "New Shares") at or around the prevailing EPRA NAV per share.

The purpose of the EGM is to ask Shareholders to authorise the Board, as permitted by and in accordance with the Articles, to issue up to 55,000,000 New Shares pursuant to (i) a proposed placing for cash of up to 38,000,000 New Shares (the "Placing"); and (ii) the proposed issue of up to 17,000,000 New Shares to Growthpoint Properties International (Pty) Ltd (or its nominee) ("Growthpoint International") in exchange for Growthpoint International's 21.58 per cent. interest in the Globalworth Poland Real Estate N.V. ("GPRE") (the "GPRE Exchange" and, together with the Placing, the "Proposals").

Further announcements providing details of the Proposals and certain disclosure and confirmation requirements required under the AIM Rules will be published in due course once the terms of the Proposals have been agreed.

Copies of the circular containing the Notice of EGM (the "Circular") will be posted to Shareholders. In addition to containing the Notice of EGM, the Circular also contains an explanation of each resolution being proposed and the recommendation of the Board to vote in favour of each resolution.

Expected timetable

 
                                                           2019 
 Publication of the Circular                           13 March 
 Latest time and date for submitting 
  online proxy vote for the Extraordinary 
  General Meeting                           11 a.m. on 27 March 
 Extraordinary General Meeting              11 a.m. on 29 March 
 

A full copy of the Circular will be available here:

https://www.globalworth.com/investor-relations/key-corporate-documents

For further information visit www.globalworth.com or contact:

Enquiries

Andrew Cox

Tel: [phone]

Head of Investor Relations & Corporate Development

Jefferies (Joint Broker)

Tel: [phone]

Stuart Klein

Panmure Gordon (Nominated Adviser and Joint Broker) Tel: [phone]

Alina Vaskina

Milbourne (Public Relations) Tel: [phone]

Tim Draper

About Globalworth / Note to Editors:

Globalworth is a listed real estate company active in Central and Eastern Europe, quoted on the AIM-segment of the London Stock Exchange. It has become the pre-eminent office investor in the CEE real estate market through its market-leading positions both in Romania and in Poland, where the Company has a majority shareholding in Globalworth Poland, a pure-play Polish real estate platform listed on the Warsaw Stock Exchange. Globalworth acquires, develops and directly manages high-quality office and logistics/light-industrial real estate assets in prime locations, generating rental income from high quality tenants from around the globe. Managed by nearly 200 professionals across Romania and Poland, the combined value of its portfolio is EUR2.5 billion, as at 31 December 2018. Over 90% of the portfolio is in income-producing assets, predominately in the office sector, and leased to a diversified array of some 650 national and multinational corporates. In Romania, Globalworth is present in Bucharest, Timisoara and Pitesti, while in Poland its assets span Warsaw, Wroclaw, Lodz, Krakow, Gdansk and Katowice. For more information, please visit www.globalworth.com and follow us on Facebook, Instagram and LinkedIn.

IMPORTANT NOTICE: This announcement has been prepared for the purposes of complying with the applicable laws and regulations of the United Kingdom and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws and regulations of any jurisdiction outside of the United Kingdom. This announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements may be identified by the use of forward-looking terminology, including the terms "targets", "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward looking statements include all matters that are not historical facts and involve predictions. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements reflect the Company's current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Company's business, results of operations, financial position, liquidity, prospects, growth or strategies and the industry in which it operates. Forward-looking statements speak only as of the date they are made and cannot be relied upon as a guide to future performance. Save as required by law or regulation, the Company disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements in this announcement that may occur due to any change in its expectations or to reflect events or circumstances after the date of this announcement.

PROPOSED ISSUE OF UP TO 55,000,000 NEW SHARES

AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

Introduction

On 11 March 2019, the Company announced an intention to raise up to EUR500 million additional equity capital through the issue of new Shares in the capital of the Company (the "New Shares") at or around the prevailing EPRA NAV per share. The Board is now seeking shareholder authority to issue up to 55,000,000 New Shares pursuant to (i) a proposed placing for cash of up to 38,000,000 New Shares (the "Placing"); and (ii) the proposed issue of up to 17,000,000 New Shares to Growthpoint Properties International (Pty) Ltd (or its nominee) ("Growthpoint International") in exchange for Growthpoint International's 21.58 per cent. interest in the Globalworth Poland Real Estate N.V. ("GPRE") (the "GPRE Exchange" and, together with the Placing, the "Proposals").

Due to considerations under the UK City Code on Takeovers and Mergers (as further described in paragraph 4 below), the GPRE Exchange is conditional upon the Placing and will not proceed unless the Company has raised additional equity capital, with the exact amount to be determined at a later date by the Board. The Placing is not conditional upon completion of the GPRE Exchange.

The New Shares to be issued pursuant to the Proposals represent up to 41.51 per cent. of the Company's existing issued share capital.

The purpose of the Circular is to set out, amongst other things, the background to and the reasons for the Proposals. It also explains why your Board considers that the Proposals are in the best interests of the Company and Shareholders as a whole and, accordingly, recommends that Shareholders vote in favour of the Resolutions contained in the notice of the Extraordinary General Meeting set out at the end of the Circular.

Background to the proposed Placing

Consistent with its strategy since IPO, the Group continues to evaluate a strong pipeline of further high-quality investment opportunities. Currently, the Group has EUR280 million of acquisitions under exclusivity in Poland, with a blended stabilised acquisition yield of over 7.5 per cent., and is also currently analysing a number of other value accretive acquisitions. This pipeline offers assets with a clear strategic fit in prime locations alongside an attractive income profile, building not only critical mass and providing scale benefits, but also providing further asset management angles and value creation potential. In addition, the Company has a very active development pipeline in Romania, where the Company has an excellent track record of delivering value from such projects.

The Board has determined that it is appropriate for the Company to raise new equity by way of the proposed Placing for cash in order to take advantage of this pipeline of attractive investment opportunities. The proposed Placing will also assist the Company in managing its gearing strategy to a long-term target LTV of below 40 per cent. The Company currently expects to price the New Shares to be issued under the Placing at or around the prevailing EPRA NAV per Share.

In order to issue new ordinary shares as part of the Placing for cash, the Board is therefore seeking shareholder authority to issue up to 38,000,000 New Shares.

Background to the proposed GPRE Exchange

GPRE is a real estate company listed on the Warsaw Stock Exchange. GPRE is active in Poland with a prime focus on the office sector. GPRE owns prime office and mixed-use high-street properties located in the centre or on the main streets of the largest cities in Poland. These buildings generate stable income due to high occupancy rates and long-term contracts with prominent tenants. GPRE's aim is to develop its property portfolio and deliver attractive returns to shareholders both in the form of dividends and capital appreciation through the ongoing asset management of its existing portfolio and through further acquisitions of properties meeting its criteria.

The Company (through a wholly-owned subsidiary) acquired the controlling stake in GPRE in December 2017 following the successful completion of a tender offer (in which it acquired a 67.90 per cent. stake) and the subsequent acquisition of additional stakes in GPRE in June and December 2018, and in January and March 2019. As at the date of the Circular and upon completion of the acquisition of GPRE shares announced by the Company on 11 March 2019, the Company's shareholding in GPRE will be 77.46 per cent.

The Company now intends to acquire Growthpoint International's holding in GPRE of 21.58 per cent., which will be satisfied by the Company issuing up to 17,000,000 New Shares to Growthpoint International pursuant to the proposed GPRE Exchange. The proposed GPRE Exchange will bring the Company's aggregate holding in GPRE to above 99 per cent. The Company may thereafter consider exercising its statutory squeeze-out rights to acquire the remainder of the GPRE shares for cash under the Dutch Civil Code. By doing so, the Company can rationalise its group structure, address commercial considerations that have emerged since the Company acquired its controlling stake in GPRE in December 2017, reduce administration costs, achieve operational synergies and allow the Company to present a simpler equity story to its investors.

In order to effect the GPRE Exchange to acquire Growthpoint International's 21.58 per cent. interest in GPRE's ordinary share capital, the Board is seeking shareholder authority to issue up to 17,000,000 New Shares.

UK City Code on Takeovers and Mergers

The Company expects Growthpoint International to wish to maintain its approximately 29 per cent. ownership in the Company following completion of the Placing and the GPRE Exchange. Accordingly, depending on the size of the Placing, the Company expects Growthpoint International to wish to subscribe for such number of New Shares in the Placing (if any) as would, together with the issue of New Shares to Growthpoint International pursuant to the GPRE Exchange, allow it to maintain such holding level.

The GPRE Exchange is conditional on the completion of the proposed Placing, the minimum quantum of which will be determined by the Board at a later date. Therefore, Growthpoint International will not, at any time, together with any persons acting in concert with it, carry 30 per cent. or more of the voting rights of the Company and be subject to the obligation under the UK City Code on Takeovers and Mergers to make a mandatory offer to all of the remaining shareholders of the Company to acquire their shares.

Related Party Transaction

Further details of the Placing and the GPRE Exchange will be notified in due course once the terms have been agreed.

Under the AIM Rules, a transaction with a related party, such as Growthpoint International, which exceeds a specific percentage in any of the class tests under the AIM Rules is treated as a related party transaction and is subject to certain disclosure and confirmation requirements. The Independent Directors have not been advised whether the terms of the participation of Growthpoint International in the Placing or the GPRE Exchange are fair and reasonable insofar as the Company's shareholders are concerned. Once the terms of the Placing and GPRE Exchange are agreed, any disclosures required under Rule 13 of the AIM Rules will be notified.

Action to be Taken

In order to be in a position to proceed with the issue of New Shares pursuant to the Proposals which will be on a non-preemptive basis, the Board is seeking shareholder approval of the Resolutions contained in the notice set out at the end of the Circular convening an Extraordinary General Meeting of the Company to be held at the registered office of the Company at Ground Floor, Dorey Court, Admiral Park, St Peter Port, Guernsey GY1 2HT, at 11 a.m. on 29 March 2019.

A paper proxy form is not enclosed with the Circular. Shareholders who do not intend to be present at the Extraordinary General Meeting are able to cast their proxy vote online by logging on to www.signalshares.com and following the instructions provided or, in the case of CREST members, by using the CREST electronic proxy appointment service set out in notes 16 and 17 to the Notice of Extraordinary General Meeting, in each case so as to be received by 11 a.m. on 27 March 2019 or, in the case of adjournment, by no later than 48 hours before the time fixed for the holding of the adjourned meeting (excluding any day that is not a business day). A paper copy proxy form can be requested from the registrars, further details of which are set out in notes 7 and 8 to the Notice of Extraordinary General Meeting. If your online proxy vote is not received by the time mentioned above and in accordance with the instructions provided online, it will be invalid. The submission of your proxy vote will not prevent you from attending and voting in person at the Extraordinary General Meeting, or any adjournments thereof, should you wish to do so and should you be so entitled.

Further information

Proposed Resolution 1 in the notice of the Extraordinary General Meeting authorises the Directors to exercise all powers of the Company to issue, grant rights to subscribe for, or to convert any securities into, Shares up to a maximum aggregate of 55,000,000 Shares pursuant to the proposed Placing and GPRE Exchange.

Proposed Resolution 2 in the notice of the Extraordinary General Meeting authorises the Directors to issue, grant rights to subscribe for, or to convert any securities into, up to a maximum aggregate of 55,000,000 Shares for the proposed Placing and GPRE Exchange pursuant to the authority given in proposed Resolution 1 as if the pre-emption provisions of Article 5.1 of the Articles did not apply in respect of such issue or grant.

Certain words and expressions used in this announcement have the meaning given to them in the Definitions section below.

You are advised to read the whole of the Circular and not to rely solely on the information contained in this announcement.

Recommendation

The Directors consider that the Resolutions to be proposed at the Extraordinary General Meeting are fair and reasonable and in the best interests of the Company and its Shareholders as a whole.

Accordingly, the Directors unanimously recommend that Shareholders vote in favour of the Resolutions as they intend to do so in respect of their personal shareholdings, representing in aggregate 25,703,002 Shares, representing approximately 18.95 per cent. of the Company's issued share capital.

DEFINITIONS

In addition to the terms defined above, the following words and expressions have the meanings set out opposite them in this section that apply throughout this announcement, unless the context otherwise requires:

 
 "AIM"                         the market of that name operated 
                                by the London Stock Exchange; 
 "AIM Rules"                   the AIM Rules for Companies issued 
                                by the London Stock Exchange; 
 "Articles"                    the articles of incorporation of 
                                the Company; 
 "Board" or "Directors"        the board of directors of the Company 
                                from time to time; 
 "Company"                     Globalworth Real Estate Investments 
                                Limited; 
 "CREST Manual"                the compendium of documents entitled 
                                CREST Manual issued by EUI from time 
                                to time and comprising the CREST 
                                Reference Manual, the CREST Central 
                                Counterparty Service Manual, the 
                                CREST International Manual, CREST 
                                Rules, CCSS Operations Manual and 
                                the CREST Glossary of Terms; 
 "EPRA"                        European Public Real Estate Association; 
 "EPRA NAV"                    net asset value calculated in accordance 
                                with EPRA's methodology as reported 
                                by the Company; 
 "GPRE"                        Globalworth Poland Real Estate N.V.; 
 "GPRE Exchange"               the proposed acquisition by the Company 
                                of Growthpoint International's 21.58 
                                per cent. interest in GPRE in exchange 
                                for approximately 17,000,000 New 
                                Shares to be issued by the Company 
                                to Growthpoint International; 
 "Group"                       the Company and its subsidiaries 
                                from time to time; 
 "Growthpoint International"   Growthpoint Properties International 
                                (Pty) Ltd (or its nominee); 
 "Independent Directors"       The Directors other than Mr. Sasse, 
                                Mr. Muchanya and Mr. Fechter, who 
                                are each directors of Growthpoint; 
 "London Stock Exchange"       the London Stock Exchange Group plc; 
 "LTV"                         loan-to-value ratio; 
 "New Shares"                  up to 55,000,000 new Shares to be 
                                issued pursuant to the proposed Placing 
                                and the GPRE Exchange; 

 "Placing"                     the proposed placing of up to approximately 
                                38,000,000 New Shares to investors; 
 "Proposals"                   the proposed Placing and the proposed 
                                GPRE Exchange; 
 "Resolutions"                 the resolutions to be proposed at 
                                the Extraordinary General Meeting 
                                and set out in the Notice of Extraordinary 
                                General Meeting at the end of the 
                                Circular; 
 "Shareholders"                the holders of any shares in the 
                                issued share capital of the Company 
                                from time to time; and 
 "Shares"                      the ordinary shares of no par value 
                                in the capital of the Company. 
 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

END

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March 12, 2019 14:30 ET (18:30 GMT)