TIDMASPL
RNS Number : 9773N
Aseana Properties Limited
22 May 2015
22 May 2015
Aseana Properties Limited
("Aseana" or the "Company")
Proposals regarding the future of the Company - posting of EGM
Circular, 2014 Annual Report and Notice of AGM
Aseana Properties Limited (LSE: ASPL), a property developer in
Malaysia and Vietnam, listed on the Main Market of the London Stock
Exchange, announces that it has today posted to the Company's
shareholders ("Shareholders") a circular (the "EGM Circular")
putting forward recommended Proposals regarding the future of the
Company to be considered at an Extraordinary General Meeting to be
held immediately prior to the 2015 Annual General Meeting, together
with its 2014 Annual Report and a letter to Shareholders containing
the notice of Annual General Meeting.
The Extraordinary General Meeting and the Annual General Meeting
will be held at 12 Castle Street, St. Helier, Jersey, JE2 3RT,
Channel Islands on Monday, 22 June 2015 at 9.00 a.m. and 9.30 a.m.
respectively.
1. Introduction and background to the Proposals
As highlighted in the Chairman's statement in the Company's 2014
Annual Report & Accounts, when the Company was launched in 2007
the Board considered it desirable that Shareholders should have an
opportunity to review the future of the Company at appropriate
intervals. Accordingly, and as required under the Company's
Articles, at the Company's 2015 Annual General Meeting the Company
must propose an ordinary resolution for it to cease trading as
presently constituted (the "Discontinuation Resolution").
However, the Board firmly believes that ceasing to trade and
placing the Company in liquidation at this time would have a
significant adverse effect upon Shareholder value. Whilst the Board
is obliged to put forward the Discontinuation Resolution at the
AGM, it does not consider that ceasing to trade at this time is in
the best interests of Shareholders. Instead, the Board believes
that a policy of orderly realisation of the Company's assets over a
period of up to three years is a more appropriate approach in order
to maximise the value of the Company's assets and returns to
Shareholders, both up to and upon eventual liquidation of the
Company.
Accordingly, in the letter to Shareholders containing the notice
of the AGM, which has been posted today together with the EGM
Circular, the Board is recommending that Shareholders vote against
the Discontinuation Resolution to be proposed at the AGM.
Instead, the Chairman has written to Shareholders to outline
details of proposals (the "Proposals") to amend the Company's
investment policy to enable a realisation of its assets in a
controlled, orderly and timely manner, with the objective of
achieving a balance between periodically returning cash to
Shareholders and maximising the realisation value of the Company's
investments (the "Divestment Investment Policy").
The adoption of the Divestment Investment Policy constitutes a
material change to the investment policy of the Company;
accordingly, the approval of the Shareholders by ordinary
resolution is required. The Resolution will be proposed at an EGM
to be held at 9.00 a.m. on 22 June 2015. The AGM will then be held
following the EGM.
If Shareholders approve the Proposals then, as assets are
realised, the Board will seek to return cash to Shareholders over
time. Further detail on the expected timing and method for returns
of capital to Shareholders is set out below. If the Proposals are
adopted, the Board aims to complete the disposal of the Company's
assets by June 2018.
2. The Proposals
2.1. The Divestment Investment Policy
The Board is proposing that the investment policy be restated as
follows:
"The Company will seek to realise the Company's assets in a
controlled, orderly and timely manner with a view to achieving a
balance between (i) returning cash to Shareholders at such times
and from time to time and in such manner as the Board may (in its
absolute discretion) determine; and (ii) maximising the realisation
value of the Company's investments.
The Board aims to complete the disposal of the Company's assets
by June 2018.
The strategy for realising individual investments will be
flexible and may need to be altered to reflect changes in the
circumstances of a particular investment or in the prevailing
market conditions. All disposals of assets to be made by the
Company will be approved by the Board.
The Company will not make new investments save that the Company
may make further investments in the RuMa Project in order to
optimise value and assist in its eventual realisation. This
restriction will not apply to capital expenditure on existing
operating assets, incurred in the ordinary course of business.
Subject to any decision by the Board to make further investments
into the RuMa Project or to incur capital expenditure on existing
projects in line with this investment policy, the net proceeds of
portfolio realisations will be returned to Shareholders at such
times and from time to time and in such manner as the Board may
determine (in its absolute discretion). The Board will take into
consideration the Company's working capital requirements (including
debt servicing and repayments), the cost and tax efficiency of
returns of capital and the requirements of Jersey law.
To the extent that the Company has not disposed of all of its
assets by the time of the AGM in 2018, in accordance with the
Articles, Shareholders will be provided with an opportunity to
review the future of the Company. To that end, an ordinary
resolution will be proposed at the AGM in 2018 that the Company
shall cease as presently constituted. For so long as the Management
Agreement has not been terminated, neither the Manager nor any
member of the Ireka Group nor any of their respective directors,
officers, agents or employees (including, for the avoidance of
doubt, Legacy Essence Limited) shall exercise votes attached to
Shares held by any of them at the time of any such vote.
Any cash received by the Company as part of the realisation
process but prior to its distribution to Shareholders will be held
by the Company as cash on deposit and/or as cash equivalents."
If the Resolution to be proposed at the Extraordinary General
Meeting is passed, the Company's existing investment policy will be
replaced and the Company will adopt and adhere to the Divestment
Investment Policy stated above. The existing Management Agreement
will remain in force.
2.2. Return of capital
Timing
Conditional upon approval by Shareholders of the Divestment
Investment Policy, the Board and the Manager are committed to
realising the Company's assets in a controlled, orderly and timely
manner with a view to achieving a balance between returning cash to
Shareholders and maximising the realisation value of the Company's
investments.
The Board intends to make distributions of not less than US$20
million in 2015. These anticipated distributions are based on the
Board's analysis of the Company's current cash balances and
expected receivables from investments that have been contractually
sold at the date of the EGM Circular.
The Company currently anticipates a first distribution in the
third quarter of 2015, subject to lenders' consent, the receipt of
confirmatory certificates from the Company's reporting accountants
and/or auditors to support the Directors' statement of solvency and
any necessary Shareholder authorities.
The Board will target additional cash distributions of US$20
million in 2015, which are predicated on the completion of certain
planned additional asset disposals before the end of the year. This
additional targeted amount is also subject to lenders' consents,
the receipt of confirmatory certificates from the Company's
reporting accountants and/or auditors to support the Directors'
statement of solvency and any necessary Shareholder
authorities.
Thereafter, the Board will regularly review progress in
implementing the Company's Divestment Investment Policy. The Board
proposes a periodic half-yearly review of the Company's working
capital requirements, in conjunction with the Company's reporting
accountants, and an assessment of the level of possible
distributions to Shareholders. If, following this review, the Board
determines that there is a cash surplus above the working capital
requirements of the Company, then that surplus cash will be
distributed to the Shareholders, less a buffer to be held back in
order to account for forecasting tolerances. The buffer shall be
calculated as 20 per cent. of the working capital requirements of
the Company at the time of such distribution, as determined by the
Board in conjunction with the Company's reporting accountants. All
such distributions will also be subject to lenders' consents, the
receipt of confirmatory certificates from the Company's reporting
accountants and/or auditors to support the Directors' statement of
solvency and any necessary Shareholder authorities.
By way of illustration, if the Company's reporting accountants
or auditors (as applicable) determine that the working capital
requirements of the Company are US$20 million at that particular
point in time, and the cash balance held by the Company is US$45
million, then US$21 million would be distributed to Shareholders,
being US$45 million less US$24 million (US$20 million x 1.2).
In addition to the half-yearly working capital review, the Board
may at any time conduct an additional working capital assessment
which may lead to a distribution to Shareholders. This may be in
circumstances where a sizeable disposal has given rise to surplus
cash during the intervening period.
Although there will be no set period for the realisation of the
Company's entire portfolio, assuming normal or favourable market
conditions the Manager believes that it will be possible to
complete the disposal of the Company's assets by June 2018.
In determining the timing of any return of cash to Shareholders,
the Board will take into account the amount of cash available and
the costs associated with such return of cash.
Method of distribution
The Board shall consider with its advisers the most appropriate
mechanism for returning surplus cash equitably to Shareholders. The
Board intends to seek the most efficient method of returning cash
to Shareholders over time, which may include proposing to
Shareholders to convert the existing issued Shares into shares
which can be redeemed at the option of the Company, in order to
facilitate the return of cash to Shareholders by way of a
compulsory redemption mechanism. The Company may also consider
making tender offers to purchase Shares. It is intended that all
Shareholders will be treated equally under any return of cash.
The introduction of a compulsory redemption mechanism, and any
subsequent compulsory redemption of Shares, or other return of cash
to Shareholders may be subject, amongst other things, to (i)
Shareholder approval; and (ii) lenders' consents.
The Board expects to write to Shareholders shortly after the EGM
to provide further detail on the methodology of cash distributions
and to seek any necessary Shareholder approvals. The Board will
also liaise with the Group's lenders to seek the necessary lender
consents.
3. Appointment of additional Directors
If Shareholders approve the Proposals at the EGM and the
Discontinuation Resolution is not passed at the AGM, the Board
intends to appoint Nicholas Paris and a representative of Legacy
Essence Limited as additional Directors, with immediate effect
after the AGM. Nicholas Paris is a representative of LIM Advisors
Limited. Each of LIM Advisors Limited and Legacy Essence Limited is
a substantial Shareholder of the Company and has given its
irrevocable undertaking to vote in favour of the Proposals at the
EGM. In addition, LIM Advisors Limited has given its irrevocable
undertaking to vote against the Discontinuation Resolution at the
AGM. Legacy Essence Limited will notify the Company of its proposed
candidate in due course.
Nicholas Paris has agreed, and the Legacy Essence Limited
representative will agree, to waive their entitlement to be paid a
fee by the Company in respect of such directorship.
Biographical details of Nicholas Paris are set out below. The
biographical details of the Legacy Essence Limited representative
will be disclosed in the announcement of the results of the EGM and
AGM.
Nicholas Paris (aged 54)
Nicholas Paris is a portfolio manager for LIM Advisors Limited
("LIM"), an Asian-focused investment management firm which is
headquartered in Hong Kong, and he specialises in investing in
closed ended investment funds. He is based in London and graduated
from Newcastle University with a Bachelor of Science degree with
Honours in Agricultural Economics. He is also a Chartered
Accountant and a Chartered Alternative Investment Analyst. He
worked with Rothschild Asset Management from 1986 until 1994,
launching specialist investment products before becoming a
corporate adviser and broker in closed ended investment funds with
a particular focus on those investing in emerging markets. In this
role, he worked between 1994 and 2001 at Baring Securities,
Peregrine Securities and then Credit Lyonnais Asia Securities. He
then joined the hedge fund industry in a series of sales roles
before founding Purbeck Advisers in 2006, which is his own advisory
and sales business. He has been advising LIM on investing in Asian
closed end funds for five years and is a director of their
London-based investment management subsidiary.
Nicholas is currently a non-executive director of Global
Resources Investment Trust plc (a fund investing in a diverse
portfolio of primarily small and mid-capitalisation natural
resources and mining companies which is traded on the main market
of the London Stock Exchange) and has been a non-executive director
of The India IT Fund Limited (a fund investing in Indian software
companies which was listed on the Channel Islands Stock Exchange)
and TAU Capital plc (a fund investing in public and private equity
in Kazakhstan which is traded on AIM).
4. Additional considerations
The Board believes that the Proposals would offer the following
benefits to Shareholders:
-- commencing a policy of the orderly realisation
of the Company's assets, rather than placing
the Company in liquidation immediately or
seeking an immediate sale of the portfolio:
-- may enable the Company to increase the
value realised on the sale of such portfolio
investments; and
-- is less likely to prejudice the Company's
negotiation position by enabling it to
negotiate realisations over time; and
-- certain investments may be matched with
best buyers in an expedient manner whilst
other investments may be positioned for
a sale over time
A managed and orderly realisation programme will permit the
Shares to continue to be listed on the Official List and admitted
to trading on the main market of the London Stock Exchange. The
Board believes that maintaining the Company's listing and the
ability of Shareholders to trade in the Shares is in the best
interests of Shareholders as it will allow for the continuation of
a daily market price to be quoted for the Shares, as required by
certain Shareholders, and maintain the option for Shareholders to
exit their investment through the market from time to time.
As a result of the Proposals, Shareholders should be aware of
the following additional considerations:
-- There is no guarantee that the change to
the Company's investment policy will provide
the returns or realise the capital sought
by Shareholders.
-- Some of the Company's investments are illiquid.
Accordingly, there may not be immediately
identifiable buyers for certain investments
of the Company and it could take considerable
time for the Company to dispose of its investments
or they may be disposed of at a discount
to their current valuations. The eventual
disposal price of the Group's assets is
unknown and it is possible that the Company
may not be able to realise some investments
at any value.
-- The maintenance of the Company as an ongoing
listed vehicle will entail administrative
and legal costs, which will decrease the
amount ultimately distributed to Shareholders.
-- As a result of the orderly realisation of
the Company's portfolio, the number of assets
held by the Company will reduce over time
and, as a consequence, the aggregate return
on the remaining portfolio will become increasingly
exposed to the performance, favourable or
unfavourable, of the remaining individual
investments.
-- Returns of cash will be made at the Directors'
sole discretion, as and when they deem that
the Company has sufficient assets available
to return cash to Shareholders and subject
to applicable Jersey law. Shareholders will
therefore have little certainty as to when
their capital will be returned.
-- Returns of cash may in certain circumstances
be subject, amongst other things, to the
Company obtaining the consent of one or
more lenders to the Group.
-- As the Company enters into an orderly realisation
programme, the discount to Net Asset Value
per Share at which the Shares are traded
may vary, as the market price for the Shares
is determined by many external factors,
including the supply and demand in the market
place. In addition, upon adoption of the
Proposals, the Board does not intend to
actively manage the discount to Net Asset
Value per Share at which the Shares may
trade or to utilise any ability of the Company
to make market purchases of its Shares.
-- The Company's total expense ratio will increase
as its investments are realised.
-- Distributions pursuant to the orderly realisation
programme are subject, amongst other things,
to the Board being able to give the necessary
certificate(s) of solvency required by Jersey
law. Distributions under the orderly realisation
programme are subject to the Board continuing
to be satisfied, on reasonable grounds,
that the Company will, at the time of distribution
and for a period of 12 months thereafter,
in respect of each distribution, continue
to satisfy the statutory solvency test.
-- In the event that the Resolution relating
to the Proposals is not passed, the Company
will continue to operate under its current
investment objective and policy. The Discontinuation
Resolution will be proposed at the AGM and
at every third annual general meeting thereafter.
Potential conflicts of interest
The Manager and other members of the Ireka Group may provide
similar management services to third parties and may make
investments for its own account that are similar to those of the
Company. In the event of a conflict of interest arising, for
example, where the Manager determines that a portfolio investment
of the Company constitutes an investment opportunity for a third
party whose investments it or another member of the Ireka Group
manages or for its own account, the Manager shall disclose all
material conflicts of interest to the Board and seek the consent of
the Board prior to effecting any sale to other funds for which the
Manager has management responsibilities. The activities of the
Manager, in its capacity as the Company's manager, will remain
subject to the overall policies, supervision and review of the
Directors and disposals made by the Company under the orderly
realisation programme will be subject to approval by the Board.
5. Extraordinary General Meeting
The Proposals are subject to Shareholder approval at an
Extraordinary General Meeting of the Company, which is to be held
at 9.00 a.m. on 22 June 2015. At the EGM, the Resolution will be
proposed to sanction the adoption of the Divestment Investment
Policy. Under the Companies Law, the Resolution requires a vote in
favour by Shareholders holding a majority of the Shares represented
at the EGM, either in person or by proxy, and voting on the
resolution, to be validly passed.
6. Irrevocable undertakings
Shareholders holding, in aggregate, 172,024,012 Shares as at the
date of the EGM Circular (representing 81.1 per cent. of the total
voting rights of the Company and including Ireka Corporation Berhad
and Legacy Essence Limited) have given their irrevocable
undertaking to vote the Shares held in their name at the time of
the EGM in favour of the Proposals.
Shareholders holding, in aggregate, 84,024,012 Shares as at the
date of this document (representing 67.7 per cent. of Shares held
by persons entitled to vote on the Discontinuation Resolution and
excluding Ireka Corporation Berhad and Legacy Essence Limited, who
may not vote the Shares held in their name in respect of the
Discontinuation Resolution) have given their irrevocable
undertaking to vote the Shares held in their name at the time of
the AGM against the Discontinuation Resolution to be proposed at
the AGM.
7. Directors' voting intentions and recommendation
The Directors consider that the Proposals are in the best
interests of the Company and Shareholders as a whole. Accordingly,
the Directors unanimously recommend that Shareholders vote in
favour of the Resolution to be proposed at the Extraordinary
General Meeting as they intend to do in respect of their own
beneficial holdings which amount, in aggregate, to 2,483,000 Shares
representing 1.2 per cent. of the total voting rights of the
Company. The Directors have given their irrevocable undertaking to
vote the Shares held in their name at the time of the EGM in favour
of the Proposals and, at the AGM, against the Discontinuation
Resolution.
8. Expected timetable of principal events
Latest time and date for 9.00 a.m. on 19 June 2015
receipt of forms of proxy
for the EGM
Latest time and date for 9.30 a.m. on 19 June 2015
receipt of forms of proxy
for the AGM
EGM record date 9.00 a.m. on 21 June 2015
AGM record date 9.30 a.m. on 21 June 2015
Time and date of Extraordinary 9.00 a.m. on 22 June 2015
General Meeting
Time and date of Annual 9.30 a.m. on 22 June 2015
General Meeting
Announcement of results 22 June 2015
of Extraordinary General
Meeting and Annual General
Meeting
If any of the above times and/or dates change, the revised times
and/or dates will be notified to Shareholders by announcement
through a Regulatory Information Service.
Words and expressions defined in the EGM Circular have the same
meanings when used in this announcement unless the context requires
otherwise. The EGM Circular, 2014 Annual Report and Notice of AGM
have also been submitted to the National Storage Mechanism and will
shortly be available for public inspection at
http://www.morningstar.co.uk/uk/nsm.
For further information:
Aseana Properties Limited Tel: 603 6411 6388
Chan Chee Kian Email: cheekian.chan@ireka.com.my
N+1 Singer Tel: 020 7496 3000
James Maxwell (Corporate Finance)/Sam Greatrex (Sales)
Tavistock Tel: 020 7920 3150
Jeremy Carey / James Verstringhe Email: jcarey@tavistock.co.uk
Notes to Editors:
London-listed Aseana Properties Limited (LSE: ASPL) is a
property developer investing in Malaysia and Vietnam.
Ireka Development Management Sdn Bhd ("IDM") is the exclusive
Development Manager for Aseana. It is a wholly-owned subsidiary of
Ireka Corporation Berhad, a company listed on the Bursa Malaysia
since 1993, which has over 45 years of experience in construction
and property development. IDM is responsible for the day-to-day
management of Aseana's property portfolio and the introduction and
facilitation of new investment opportunities.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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