ADVFN Logo ADVFN

We could not find any results for:
Make sure your spelling is correct or try broadening your search.

Trending Now

Toplists

It looks like you aren't logged in.
Click the button below to log in and view your recent history.

Hot Features

Registration Strip Icon for charts Register for streaming realtime charts, analysis tools, and prices.

61HI Swan Housing 48

107.645
0.00 (0.00%)
Last Updated: 01:00:00
Delayed by 15 minutes
Name Symbol Market Type
Swan Housing 48 LSE:61HI London Bond
  Price Change % Change Price Bid Price Offer Price High Price Low Price Open Price Traded Last Trade
  0.00 0.00% 107.645 0 01:00:00

Swan Housing Capital Announcement of Bond holder Consent Solicitation (5304K)

21/12/2022 5:01pm

UK Regulatory


Swan Housing 48 (LSE:61HI)
Historical Stock Chart


From Jun 2022 to Jun 2024

Click Here for more Swan Housing 48 Charts.

TIDM61HI

RNS Number : 5304K

Swan Housing Capital

21 December 2022

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014 AS IMPLEMENTED INTO UK LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 (AS AMED), AS SUPPLEMENTED BY THE MARKET ABUSE (AMMENT) (EU EXIT) REGULATIONS (SI 2019/310)

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO, OR TO ANY PERSON LOCATED OR RESIDENT IN, ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO RELEASE, PUBLISH OR DISTRIBUTE THIS DOCUMENT.

21 DECEMBER 2022

SWAN HOUSING CAPITAL PLC

(a public limited company incorporated in England and Wales,

with registration number 9362244 under the Companies Act 2006 )

(the Issuer)

ANNOUNCEMENT OF CONSENT SOLICITATION

GBP250,000,000 3.625 per cent. Secured Bonds due 2048

(XS1195576233)

(the Bonds)

The Issuer announces today that it is convening a meeting of holders of the Bonds (the Bondholders) for the approval by Eligible Bondholders, by Extraordinary Resolution pursuant to the terms and conditions of the Bonds (the Conditions) and the Bond Trust Deed dated 5 March 2015 constituting the Bonds (the Bond Trust Deed), of a proposal (the Proposal):

(a) to waive the failure by Swan Housing Association Limited (the Borrower) to deliver to M&G Trustee Company Limited (as Security Trustee) the consolidated audited financial statements of the Borrower (as Group Parent) in respect of the financial year ended 31 March 2022 pursuant to, and in accordance with the time periods required under, the Loan Agreement dated 5 March 2015 (the Loan Agreement) between the Issuer, the Borrower and the Security Trustee (the Borrower Waiver);

(b) to waive the failure by the Issuer to deliver to M&G Trustee Company Limited (as Bond Trustee) its balance sheet, profit and loss account and report in respect of the financial year ended 31 March 2022 pursuant to, and in accordance with the time periods required under, the Bond Trust Deed (the Issuer Waiver); and

(c) to consent to the replacement of the requirement in the Loan Agreement to provide consolidated audited financial statements of the Borrower (as Group Parent) in respect of the financial years ended 31 March 2023 onwards with the requirement to provide consolidated audited financial statements of Sanctuary Housing Association (as the new parent of the Borrower following the occurrence of the Sanctuary Acquisition (as defined below)) and audited individual accounts of the Borrower (the Consent),

each as more fully described in the Consent Solicitation Memorandum prepared by the Issuer dated 21 December 2022 (the Consent Solicitation Memorandum).

Capitalised terms used in this announcement and not otherwise defined herein have the meanings given to them in the Consent Solicitation Memorandum.

Rationale for the Proposal

The Bonds were issued by the Issuer on 5 March 2015. The issue proceeds of the Bonds were on-lent to the Borrower pursuant to the Loan Agreement.

The Borrower has encountered significant challenges during the year in its commercial operations, including cost overruns and delays to works leading to slower sales. As a result, the amount of debt in the Borrower has increased, as has the level of on-lending by the Borrower to these subsidiaries.

It was announced on 10 December 2021 that the Borrower would pursue a merger with Orbit Group, with the proposal being for the Borrower to join the Orbit group as a subsidiary. In January 2022, Orbit advanced a secured loan of GBP25 million, which was subsequently increased to GBP40 million in March 2022.

Following lengthy discussions and a detailed due diligence process, it was confirmed in late September 2022 that the merger between the Borrower and Orbit would not proceed.

The Borrower and Sanctuary Housing Association (Sanctuary) then entered into detailed discussions regarding a potential transaction which, if consummated, would involve the Borrower becoming a subsidiary of Sanctuary.

The business combination between Sanctuary and the Borrower is subject to obtaining appropriate consents and satisfactorily concluding commercial discussions with third parties. However, in the interim, (a) the Borrower and Sanctuary have entered into a managed service agreement whereby Sanctuary will manage the Borrower and (b) Sanctuary Affordable Housing Limited (a member of the Sanctuary group) has provided the Borrower with a secured loan of GBP50 million, which has been used (i) to repay the loan from Orbit in full and (ii) as additional liquidity into the Borrower.

Provision of accounts

The Swan group operates a number of development schemes which require a high level of management judgement and are subject to high levels of estimation uncertainty. The draft consolidated financial statements of the Borrower include an impairment charge of GBP138.6 million recognised in the year to 31 March 2022 and an impairment charge of GBP55.3 million recognised as a prior year adjustment in the year to 31 March 2021 (Borrower: GBP36.9 million impairment and GBP149.6 million release of subsidiary loans in the year to 31 March 2022) in respect of these development schemes. The developments have been impacted by significant operational challenges, resulting from factors which include changes to the Borrower's management team and changes to the building regulations, together with the impact of macro-economic conditions. As a result, the Borrower's current management team have been unable to provide sufficient audit evidence to substantiate the quantum and timing of the impairment charge and any related liabilities.

Grant Thornton LLP have been commissioned to carry out the year end audit of the Borrower and the Issuer. As regards the Borrower, these challenges have restricted Grant Thornton's ability to conduct appropriate audit procedures over these balances and transactions. As a result, Grant Thornton have been unable to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on the consolidated financial statements of the Borrower. It is, however, prepared to conclude that the Borrower remains a "going concern" on the basis of a merger.

Pursuant to:

(a) Clause 8.1(a) of the Loan Agreement, the Borrower is required to supply to the Issuer and the Security Trustee, not later than 180 days after the end of each relevant Financial Year, a copy of the consolidated audited financial statements of the Group Parent for such Financial Year;

(b) Clause 14.1(c) of the Bond Trust Deed, the Issuer is required to cause to be prepared by the Auditors, in respect of each annual accounting period, accounts in such form as will comply with all relevant legal and accounting requirements and all requirements for the time being of the London Stock Exchange; and

(c) Clause 14.1(e) of the Bond Trust Deed, the Issuer is required to send to the Bond Trustee, inter alia, two copies in English of every balance sheet, profit and loss account and report prepared in connection with the end of a financial year, not later than 180 days after the end of such financial year.

As a result of the Orbit merger discussions not proceeding in late September, the Borrower and the Issuer did not deliver their accounts in accordance with the above provisions.

The Borrower and the Issuer expect to be able to deliver their accounts subject to a business combination between Sanctuary and the Borrower taking place and the Borrower thereby becoming a subsidiary of Sanctuary (the Sanctuary Acquisition). However, in relation to the Borrower, such accounts are expected to include a disclaimer of opinion for the reasons stated above.

Sanctuary would like assurance that any breaches caused by the failure of the Borrower and the Issuer to deliver accounts in accordance with the timings referred to above or by the provision of the Borrower accounts with a disclaimer of opinion are waived by Bondholders prior to the completion of the Sanctuary Acquisition. The Issuer is therefore seeking the consent of Bondholders in respect of such waivers, subject to the occurrence of the Sanctuary Acquisition (which is expected to take place on or prior to 31 January 2023). The Sanctuary Acquisition is subject to obtaining appropriate consents and satisfactorily concluding commercial discussions with third parties.

Ongoing obligations

Subject to the Sanctuary Acquisition becoming unconditional and completing, the Borrower will no longer be a "Group Parent" (notwithstanding the defined term referred to under the Loan Agreement) and the Borrower and Sanctuary do not envisage that consolidated audited financial statements of the Borrower would be required by any other creditors or third parties going forward. Sanctuary will engage auditors to undertake an audit of its financial statements on a consolidated basis and, after the completion of the Sanctuary Acquisition and in respect of the financial year ending 31 March 2023, this would include the Borrower. The Issuer is therefore seeking the consent of the Bondholders to direct the Bond Trustee to consent to the Issuer agreeing to amend the requirement in the Loan Agreement in relation to the provision of accounts in respect of the financial years ended 31 March 2023 onwards so that the Borrower is instead required to deliver a copy of the consolidated audited financial statements of Sanctuary for each financial year and also a copy of the individual (not consolidated) audited financial statements of the Borrower.

The Proposal

The Issuer is convening a meeting of the Bondholders for the approval by Eligible Bondholders, by Extraordinary Resolution, of:

   (a)           the Borrower Waiver; 
   (b)          the Issuer Waiver; and 
   (c)           the Consent, 

in each case, subject to the occurrence of the Sanctuary Acquisition,

all as more fully set out in the form of Extraordinary Resolution set out in the Notice of Meeting annexed to the Consent Solicitation Memorandum.

Majority Bondholders

Prior to the date of this announcement, the Issuer has discussed the Proposal with Eligible Bondholders who the Issuer understands holds 80 per cent. of the Outstanding Principal Amount of the Bonds (the Majority Bondholders). After reviewing the Proposal, the Majority Bondholders have indicated that they find the Proposal acceptable and that they intend to vote in favour of the Proposal in respect of their respective holdings of the Bonds. However, no assurance is given that the Majority Bondholders will vote in favour of the Proposal in respect of all or some of their respective holdings of the Bonds.

Early Voting Fee

The Issuer will pay to each Eligible Bondholder from whom a valid Electronic Voting Instruction is received by the Tabulation Agent (and not subsequently validly revoked) prior to the Early Instruction Deadline an amount equal to GBP1.00 for each GBP1,000 in Outstanding Principal Amount of the Bonds the subject of such valid Electronic Voting Instruction (the Early Voting Fee).

The Early Voting Fee will be payable whether the Electronic Voting Instruction is an instruction to vote for or against the Extraordinary Resolution. However, payment of the Early Voting Fee will be subject to satisfaction of the payment conditions (the Payment Conditions), namely:

(a) satisfaction of the Consent Conditions (as further described in the Consent Solicitation Memorandum); and

(b) the Supplemental Bond Trust Deed and the Supplemental Loan Agreement being executed by each of the parties thereto; and

   (c)        the occurrence of the Sanctuary Acquisition. 

To be eligible to receive the Early Voting Fee, each Eligible Bondholder who submits a valid Electronic Voting Instruction must not attend, or seek to attend, the Meeting in person or make any other arrangements to be represented at the Meeting (other than by way of their Electronic Voting Instruction(s)). Where payable, the Early Voting Fee for any received (and not revoked) Electronic Voting Instructions will be paid not later than the second Business Day following the date on which the Payment Conditions are satisfied.

Amendments to or Withdrawal of the Proposal

The Issuer reserves the right, in its sole discretion, to extend, amend or withdraw any or all of the Proposal as described in the Consent Solicitation Memorandum.

The Issuer will promptly give notice to Bondholders of any such extension, amendment or withdrawal as described in the Consent Solicitation Memorandum.

Indicative Timetable

Below is an indicative timetable showing one possible outcome for the timing of the Proposal, based on the dates printed in the Consent Solicitation Memorandum and assuming that the Meeting is not adjourned. This timetable is subject to change and dates and times may be extended or changed by the Issuer in accordance with the terms of the Proposal, as described in the Consent Solicitation Memorandum. Accordingly, the actual timetable may differ significantly from the timetable below.

 
                                 Event                                            Date 
 Announcement of Proposal 
  Proposal announced and Notice of Meeting                      21 December 2022 
  published. 
 Consent Solicitation Memorandum; Transaction 
  Documents (as defined in the Bond Trust 
  Deed); draft Supplemental Bond Trust Deed; 
  and draft Supplemental Loan Agreement available 
  on request from the Tabulation Agent. 
 Early Instruction Deadline 
  Deadline for receipt by the Tabulation                        4:00 p.m. (London 
  Agent of valid Electronic Voting Instructions                 time) on 9 January 
  to appoint the Tabulation Agent as proxy                      2023 
  to be valid for receipt of the Early Voting 
  Fee. 
            Expiration Time 
             Deadline for revocation of Electronic Voting                  4:00 p.m. (London 
             Instructions that have been submitted.                        time) 12 January 2023 
            Meeting 
             Meeting to be held at the offices of Addleshaw                12:00 noon (London 
             Goddard LLP, Milton Gate, 60 Chiswell Street,                 time) 17January 2023 
             London EC1Y 4AG. 
            Announcement of the results of the Meeting 
             Announcement of the results of the Meeting.                   As soon as reasonably 
             If the Extraordinary Resolution is passed                     practicable following 
             at the Meeting, Supplemental Loan Agreement                   the Meeting on 17 
             to be executed.                                               January 2023 
            Settlement Date 
             (2 business days following the satisfaction                   Expected to be not 
             of the Payment Conditions)                                    later than 4 April 
                                                                           2023 
 

The above dates and times are subject, where applicable, to the earlier deadlines set by the Clearing Systems and any intermediary through which Eligible Bondholders hold their Bonds and to the right of the Issuer to amend or withdraw the Proposal, as described in this Consent Solicitation Memorandum.

Eligible Bondholders are advised to check with any bank, securities broker or other intermediary through which they hold their Bonds when such intermediary would need to receive instructions from an Eligible Bondholder in order for such Eligible Bondholder to participate in, or (in the limited circumstances in which revocation is permitted) to validly revoke their instruction to participate in, the Proposal and/or otherwise vote in respect of the Extraordinary Resolution before the deadlines specified above. The deadlines set by any such intermediary and each Clearing System for the submission and (where permitted) revocation of Electronic Voting Instructions will be earlier than the relevant deadlines above.

Further Information

Requests for information in relation to the Proposal should be directed to the Sole Solicitation Agent at:

Centrus Financial Advisors Limited

Senator House

85 Queen Victoria Street

London EC4V 4AB

   Attention:          Philip Jenkins 
   Telephone:        +44 (0)7788 209354 
   Email:               phil.jenkins@centrusadvisors.com 

Requests for information in relation to the submission of an Electronic Voting Instruction should be directed to the Tabulation Agent at:

Kroll Issuer Services Limited

The Shard

32 London Bridge Street

London SE1 9SG

   Attention:          Owen Morris / Harry Ringrose 
   Telephone:     +44 (20) 7704 0880 
   Email:            swan@is.kroll.com 

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014 (MAR) as implemented into UK law by virtue of the European Union (Withdrawal) Act 2018 (as amended), as supplemented by the Markey Abuse (Amendment) (EU Exit) Regulations (SI 2019/310) (UK MAR) until the release of this announcement.

This announcement is released by Swan Housing Capital plc and contains inside information for the purposes of UK MAR, encompassing information relating to the Proposal described above. For the purposes of UK MAR, this announcement is made by Susan Hickey (Chief Executive).

Disclaimer

This announcement must be read in conjunction with the Consent Solicitation Memorandum that contains important information which should be read carefully before any decision is made with respect to the Proposal. If any Bondholder is in any doubt as to the action it should take, it is recommended to seek its own financial and legal advice, including in respect of any tax consequences, immediately from its broker, bank manager, solicitor, accountant, independent financial, tax or legal adviser authorised under the Financial Services and Markets Act 2000 (the FSMA) (if in the United Kingdom) or other appropriately authorised financial adviser. Any person whose Bonds are held on its behalf by a broker, dealer, bank, custodian, trust company or other nominee must contact such entity if it wishes to participate in the Proposal.

Solicitation and Distribution Restrictions

Neither this announcement nor the Consent Solicitation Memorandum constitutes an invitation to participate in the Proposal in any jurisdiction in which, or to any person to whom, it is unlawful to make such invitation or for there to be such participation under applicable securities laws. The distribution of this announcement and the Consent Solicitation Memorandum in certain jurisdictions may be restricted by law. Persons into whose possession this announcement and the Consent Solicitation Memorandum comes must inform themselves about and observe any such restrictions.

This announcement and the Consent Solicitation Memorandum have not been filed with, or reviewed by, any national or local securities commission or regulatory authority of any jurisdiction, nor has any such commission or authority passed upon the accuracy or adequacy of this announcement or the Consent Solicitation Memorandum. Any representation to the contrary is unlawful and may be a criminal offence.

This announcement and the Consent Solicitation Memorandum do not constitute an offer to buy or a solicitation of an offer to sell the Bonds, and the Proposal will not apply to Bondholders in any jurisdiction in which the Proposal is unlawful.

, 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 rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

DOCPPGUUPUPPGMG

(END) Dow Jones Newswires

December 21, 2022 12:01 ET (17:01 GMT)

1 Year Swan Housing 48 Chart

1 Year Swan Housing 48 Chart

1 Month Swan Housing 48 Chart

1 Month Swan Housing 48 Chart

Your Recent History

Delayed Upgrade Clock