TIDMIERE
RNS Number : 4141J
Invista European Real Estate Trust
30 June 2011
STRATEGIC UPDATE
Proposed change of investment objectives and
prospective appointment of new manager
30 June 2011
The Board of Invista European Real Estate Trust SICAF ("the
Company") announced on 18 March 2011 that it had given notice to
its current manager, with effect from 18 September 2012 (the
"Notice Period"), and that it was reviewing how the Company's
assets could best be managed in the future. The Board is now able
to update shareholders on a proposed new strategy for the Company
and the prospective appointment of a new manager.
Proposed new strategy
The Board has consulted with shareholders and considered
proposals from a wide range of prospective new managers. It has
concluded with the assistance of its advisers that, in the light of
the substantial discount to NAV at which the shares of the Company
currently trade, a structured realisation strategy would be in the
best interest of shareholders.
Subject to the approval by shareholders of the proposed revised
investment objectives, all existing properties will be sold as
expeditiously as is consistent with the protection of value, with
an initial focus on those properties already optimised for sale and
those in markets where the Company has few assets, so as to reduce
property management costs.
The sales proceeds will be applied in the first instance to the
repayment of debt and thereafter returned to shareholders within a
targeted timescale of approximately three years from the date of
this announcement. New property will not be acquired unless such an
acquisition is deemed by the Board, in consultation with the
manager, to be essential to protect or enhance the realisable value
of an existing asset. Where there is an opportunity to accelerate
the realisation of optimal value for shareholders, a corporate
transaction, such as the merger or sale of the Company, will be
considered.
Appointment of new manager
The Board has decided to appoint Internos Real Investors LLP
("Internos") to execute the proposed new strategy. Heads of terms
for an investment management agreement ("IMA") with Internos have
been signed, under which Internos would take over the management of
the Company and its assets with effect from a date no later than
the end of the Notice Period.
The appointment of Internos is subject to (i) the agreement of a
definitive IMA, (ii) the final termination of the Company's
existing IMA with Invista Real Estate Investment Management Limited
("IREIM"), (iii) the approval of the Company's principal lender,
(iv) the approval of Internos as the Company's promoter by the
Luxembourg regulator, the Commission de Surveillance du Secteur
Financier and (v) the Company's shareholders passing resolutions at
a General Meeting (a) adopting the new investment objectives
outlined above and (b) approving changes to the maximum exposure to
any single property or tenant, in order to facilitate the disposal
programme.
Under the heads of terms, the Company has agreed, subject to
final contract, to pay Internos a management fee of 1.25% per annum
on the net asset value attributable to the Company's ordinary
shareholders, subject to a minimum of EUR1.0 million per annum.
Assuming an unchanged level of NAV, this would be approximately
EUR1.6 million per annum lower than the management fee payable
under the existing IMA with IREIM, representing a reduction of
47%.
In addition, the Company will pay Internos a realisation fee
equal to 12.5% of the amount by which cash returned to ordinary
shareholders exceeds EUR82.8 million (being the average market
capitalisation in the 30 days preceding this announcement converted
at the GBP/EUR exchange rate at the close of business on 29 June
2011), compounded at 10% per annum.
In the period between signing the IMA and assuming
responsibility for the day to day management of the Company,
Internos will conduct a full strategic and operational review of
all aspects of the Company's property portfolio, banking facilities
and administrative arrangements (with a view to achieving
additional cost reductions for the Company), for which it will be
paid a fee of EUR75,000 per month.
Shareholder circular
A circular will be sent to shareholders in due course, along
with notice of a General Meeting to approve, inter alia, the
proposed change in investment objectives.
All enquiries to:
J. P. Morgan Cazenove (joint broker)
William Simmonds +44 20 7588 2828
Liberum Capital (joint broker)
Chris Bowman +44 20 3100 2000
Hudson Sandler (public relations)
Michael Sandler +44 20 7796 4133
Notes to editors:
Invista European Real Estate Trust SICAF ("IERET")
IERET is a closed ended investment company domiciled in
Luxembourg, listed on the London Stock Exchange since December
2006. As at 31 March 2011, it owned 43 commercial properties,
located mainly in France and Germany, valued at EUR509.5 million;
since that date, two properties have been sold for aggregate
consideration of EUR22.5 million. As at 31 March 2011, IERET's
total borrowings were EUR347.5 million, with cash balances
(excluding tenant deposits of EUR4.5 million and escrow items of
EUR3.5 million) of EUR37.7 million, giving a net debt position of
EUR309.8 million; at the same date, NAV attributable to ordinary
shareholders (on an IFRS basis) was EUR144.7 million and there were
EUR29.7 million of preference shares outstanding.
Internos Real Investors LLP ("Internos")
Internos is a real estate fund management specialist with a
particular expertise in Continental Europe. Funds managed by
Internos collectively own more than 250 commercial property
investments, predominantly located in Germany, France, Spain and
The Netherlands. Headquartered in Mayfair, London, Internos has
three offices in continental Europe, a team of 70 people and
significant experience of taking over portfolios and managing
realisation strategies. Internos is an independent owner managed
business.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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