Raven Property Group Limited Re-Designation of Convertible Preference Shares (6821K)

TIDMRAV

RNS Number : 6821K

Raven Property Group Limited

23 April 2020

23 April 2020

Raven Property Group Limited ("Raven" or the "Company")

Proposed Re-Designation of 100% of Raven's Convertible Preference Shares into New Ordinary Shares and Preference Shares at a ratio of 0.6108 New Ordinary Shares and 0.5849 New Preference Shares for every 1 Convertible Preference Share (the "Proposal")

The Board of Raven Property Group Limited announces that, following discussions and agreement with 71.3% of the Company's ordinary shareholders and 71.9% of its convertible preference shareholders, including directors' holdings, the Company proposes to re-designate all of the Convertible Preference Shares into New Ordinary Shares and New Preference Shares. Under the Proposal, holders of Convertible Preference Shares will receive 0.6108 New Ordinary Shares and 0.5849 New Preference Shares for every 1 Convertible Preference Share*.

If the necessary approvals are obtained from Ordinary and Convertible Preference Shareholders, the Proposal will become binding on all holders of Convertible Preference Shares and will result in the Convertible Preference Shares ceasing to exist as an issued class of shares.

The Directors believe that the Company and its shareholders will benefit from the Proposal as:

-- It simplifies Raven's existing capital structure and creates greater liquidity in the Ordinary Shares and Preference Shares

-- It reduces the impact of dilution in the Ordinary Shares on a conversion of the Convertible Preference Shares

-- It removes any concerns regarding the refinancing of the Convertible Preference Shares upon their maturity in July 2026

-- Convertible Preference Shareholders will receive increased income, and exposure to two share classes with greater liquidity listed on the London Stock Exchange's main market (the Convertible Preference Shares are solely listed on The International Stock Exchange), with income upside potential on the Ordinary Shares

   --      The Proposal is accretive to IFRS earnings per ordinary share. 

As a result of the Proposal , on a pro forma basis, and using 31 December 2019 foreign exchange rates, Net Asset Value per Ordinary Share as at 31 December 2019 of 76 pence would decrease by 1.2% to 75 pence per share

The Proposal will be conditional, inter alia, on Ordinary Shareholders and Convertible Preference Shareholders passing the required resolutions to approve them.

The Board has consulted with a number of the Company's largest institutional Ordinary Shareholders and Convertible Preference Shareholders regarding the Proposal. Invesco Asset Management Limited, which owns 139,678,106 Ordinary Shares (28.5% of issued Ordinary Shares) and 42,118,860 Convertible Preference Shares (21.3% of issued Convertible Preference Shares) has irrevocably committed to vote in favour of the Proposal, as has Quilter Investors, which owns a further 40,404,752 Ordinary Shares (8.3% of issued Ordinary Shares) and 93,748,941 Convertible Preference Shares (47.3% of issued Convertible Preference Shares). Other institutional shareholders representing approximately 23.73% of Ordinary Shares have indicated their intention to vote in favour of the Proposal. The Directors also intend to unanimously vote in favour of the Proposal in respect of their respective individual holdings of Ordinary Shares and Convertible Preference Shares. In total 71.3% of Ordinary Shareholders and 71.9% of Convertible Preference Shareholders have irrevocably committed or indicated their intention to vote in favour of the Proposal.

The Company intends to publish circulars (including notices of an extraordinary general meeting and a Convertible Preference Shareholder class meeting) to Ordinary Shareholders and Convertible Preference Shareholders in respect of the Proposal outlined above and a further announcement will be made in due course. Subject to shareholders passing the necessary resolutions, it is anticipated that 119,682,763 New Ordinary Shares and 114,602,181 New Preference Shares would be issued under the Proposal. As this constitutes greater than 20% of each issued share class, a prospectus in respect of the New Ordinary Shares and New Preference Shares will be published at the same time.

Purchase of Ordinary Shares, Preference Shares and Convertible Preference Shares from Invesco Asset Management Limited ("IAML")

As announced on 11 March 2020, and due to current market turmoil, the Company extended the long stop dates for the purchase of its shares from IAML to 31 July 2020. The Company will reassess the purchases as conditions settle and will make a further announcement when appropriate. In light of the Proposal and conditional upon the re-designation proceeding, the Company's contract with IAML to purchase 42,118,860 Convertible Preference Shares will terminate.

Trading update

The impact of Coronavirus on the business is developing as cases in Russia increase, greater lockdown measures are introduced and the effect moves through the supply chain. The City of Moscow and regional governments have instigated a series of quarantine and social distancing measures which we are adhering to and the Russian Government is introducing measures to support sectors most affected. The majority of the Company's rental income is received on a monthly basis and these measures are yet to have a significant impact, with 92.05% of rents having been received for April. We will be carefully monitoring the ongoing impact on our portfolio and operations. The Company's warehouses remain fully operational as an essential element of the supply chain infrastructure.

We have experienced continuing demand from supermarket and food retailers and on 3 April 2020 renewed 76,000sqm with an existing tenant together with an additional 25,000sqm of new space on ten year lease terms. We have also leased a further 60,000sqm on short term tenancies since the year end, to assist with greater stock holding requirements.

Our banking relationships are strong and we are in dialogue with all of our principal funders. Our loan facilities are predominantly asset secured with no cross collateralisation.

We have GBP87 million of cash as at today's date.

At the time of issuing the shareholder circulars we should have greater visibility on the impact of the pandemic on our business and we will issue a further trading update at that point.

This is the third macro economic crisis the Group has experienced since incorporation in 2005 and the management team is experienced and resilient.

Glyn Hirsch, Chief Executive of Raven commented:

"The issue of Convertible Preference Shares was made at a particular time for a particular purpose which has now passed. For some time we have been considering how to simplify the Group's capital structure whilst treating all shareholder classes fairly. I am delighted to have such overwhelming shareholder support for a reorganisation unrelated to the Coronavirus."

The information contained in this announcement relating to the proposed re-designation of the Company's Convertible Preference Shares is considered by Raven Property Group Limited to constitute inside information as stipulated under the Market Abuse Regulation (EU) No.596/2014. Upon the publication of this announcement via a Regulatory Information Service, this inside information will be considered to be in the public domain.

The person responsible for arranging for the release of this announcement on behalf of the Company is Benn Garnham, Company Secretary.

* - the ratio of New Ordinary Shares and New Preference Shares to be exchanged for Convertible Preference Shares is based on the closing middle market quotations for an Ordinary Share, Preference Share and Convertible Preference Share on 20 April 2020 which were as follows:

   --      36.4p in respect of an Ordinary Share; 
   --      115.0p in respect of a Preference Share; and 
   --      89.5p in respect of a Convertible Preference Share. 

Enquiries:

 
 Raven Property Group Limited                Tel: + 44 (0) 1481 712955 
  Anton Bilton 
  Glyn Hirsch 
 Novella Communications (public relations    Tel: [phone] 
  adviser) 
  Tim Robertson 
  Fergus Young 
 N+1 Singer (UK joint broker)                Tel: [phone] 
  Corporate Finance - James Maxwell 
  / James Moat 
  Sales - Alan Geeves / James Waterlow 
 Numis Securities Limited (UK joint         Tel: + 44 (0) 207 260 1000 
  broker) 
  Alex Ham / Jamie Loughborough / 
  Alasdair Abram 
 Renaissance Capital (South African             Tel: [phone] 
  broker) 
  Yvette Labuschagne 
 Renaissance Capital (Russian broker)            Tel: + 7 495 258 7770 
  David Pipia 
 Ravenscroft (TISE sponsor)                  Tel: + 44 (0) 1481 729100 
  Emma Ozanne 
 

About Raven Property Group

Raven Property Group Limited was founded in 2005 to invest in class A warehouse complexes in Russia and lease to Russian and International tenants. Its Ordinary Shares and preference shares are listed on the Main Market of the London Stock Exchange and admitted to the Official List of the UK Listing Authority and the Official List of The International Stock Exchange ("TISE"). Its Ordinary Shares also have a secondary listing on the main board of the Johannesburg Stock Exchange and the Moscow Stock Exchange. Its convertible preference shares are admitted to the Official List of TISE and to trading on the SETSqx market of the London Stock Exchange. The Group operates out of offices in Guernsey, Moscow and Cyprus and has an investment portfolio of circa 1.9 million square metres of Grade "A" warehouses in Moscow, St Petersburg, Rostov-on-Don, Novosibirsk and Nizhny Novgorod and 49,000 square metres of commercial office space in St Petersburg. For further information visit the Company's website: www.theravenpropertygroup.com

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April 23, 2020 07:45 ET (11:45 GMT)