TIDMCAPC
RNS Number : 8479F
Capital & Counties Properties Plc
19 November 2020
19 November 2020
LEI: 549300TTXXZ1SHUI0D54
NOT FOR DISTRIBUTION IN OR INTO THE UNITED STATES OR INTO,
AUSTRALIA, CANADA, JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH
DISTRIBUTION WOULD BE PROHIBITED BY APPLICABLE LAW
CAPITAL & COUNTIES PROPERTIES PLC
("Capco" or the "Issuer")
Exchangeable Bond Offering
Capital & Counties Properties PLC today announces the launch
of an offering (the "Offering") of approximately GBP250 million of
Secured Exchangeable Bonds due 2026, exchangeable for ordinary
shares of Shaftesbury PLC ("Shaftesbury") (the "Bonds").
Background
Capco is positioned as a strongly capitalised prime central
London REIT centred around its world-class Covent Garden estate.
Whilst COVID-19 has had a significant impact on Capco's customers
and business in the near term, Capco continues to believe in the
long-term prospects and resilience of prime central London and in
particular the West End.
Capco has a shareholding of 25.2 per cent in Shaftesbury shares,
as a result of committing to acquire 80.72 million shares for 540
pence per share in May 2020 and a further 16.25 million shares for
400 pence per share in October 2020. These investments were priced
attractively and are consistent with Capco's strategy to invest in
attractive opportunities on or near the Covent Garden estate.
Capco continues to actively manage its portfolio of assets with
a focus on creating long-term value for shareholders as well as
maintaining a strong balance sheet and significant liquidity to
manage the business through current market uncertainty and to
position it for long-term growth.
Rationale and use of proceeds
Capco intends to use the net proceeds of the Offering for
general corporate purposes and to reduce its borrowings under the
Covent Garden revolving credit facility. Capco believes that the
Offering will enhance Capco's financial position, providing a more
appropriate funding balance across the group while also allowing it
to diversify medium term sources of finance, extend its maturity
profile and keep its cost of debt low. The Offering will provide
additional financial flexibility and liquidity to Capco.
Based on Capco's net debt of GBP721 million and the independent
valuation of Capco's property portfolio as at 30 June 2020,
together with the proceeds of GBP76.5 million from the sale of the
Wellington Block received in October 2020, deferred consideration
of GBP105 million to be received in November 2020 in connection
with the sale of Earls Court and payments of GBP88 million and
GBP65 million for Shaftesbury shares in August and November 2020,
Capco's net debt to total gross assets would continue to be
approximately 25 per cent[1] following the issue of the Bonds. On
the same basis, the loan to value ratio for Covent Garden would be
reduced to 24 per cent (30 June 2020: 36 per cent).
Following the issue of the Bonds, Capco will have access to
approximately GBP890 million of cash and undrawn facilities.
The shares to be pledged in connection with the Bonds are
expected to represent approximately one-third of Capco's
shareholding. Capco retains the right to settle any exchange of the
Bonds in Shaftesbury shares, cash or a combination of Shaftesbury
shares and cash.
Offering of Bonds
The Bonds will be issued by Capital & Counties Properties
PLC and will represent unsubordinated and secured obligations of
the Issuer. The Bonds will be issued at par and are expected to
carry a coupon of between 1.50 and 2.00 per cent per annum payable
semi-annually in arrears in equal instalments and will, subject to
certain conditions, be exchangeable into fully paid ordinary shares
of Shaftesbury (the "Shares") or, at the election of the Issuer, a
cash alternative amount. The initial exchange price (the "Exchange
Price") is expected to be set at a premium of between 35 and 40 per
cent to the volume weighted average price of a Share on the London
Stock Exchange between launch and pricing today.
The Issuer will grant a first ranking pledge over the secured
collateral, composed initially of approximately nine per cent of
the issued shares of Shaftesbury PLC at the date hereof[2]. Under
the terms of the Bonds, the Issuer will have the right to elect to
settle any exchange in Shares, cash or a combination of Shares and
cash. The secured collateral will be subject to adjustment in
certain circumstances in line with market practice.
The Issuer will have the option to increase the Offering size
prior to pricing by up to GBP25 million.
Settlement of the Bonds is expected to take place on or around
30 November 2020 (the "Settlement Date"). If not previously
exchanged, redeemed or purchased and cancelled, the Bonds will be
redeemed at par on 30 March 2026. The Issuer will have the option
to redeem all outstanding Bonds (i) on or after the date falling 21
days after the interest payment date falling on March 2024 at par
plus accrued interest if the value of the Shares underlying
GBP100,000 in principal amount of the Bonds equals or exceeds
GBP130,000 for at least 20 out of 30 consecutive trading days (ii)
as specified in the terms and conditions of the Bonds, in the event
of an offer or scheme of arrangement relating to the Shares where
the consideration consists wholly of cash or (iii) at any time, if
85 per cent or less of the principal amount of the Bonds remains
outstanding.
Capco has agreed to a lock-up ending 90 days after the
Settlement Date for its Shares, subject to certain exceptions.
The final terms of the Bonds are expected to be announced
through a press release once the bookbuilding process is completed.
Application is intended to be made for the Bonds to be admitted to
trading on the unregulated open market (Freiverkehr) of the
Frankfurt Stock Exchange.
BNP PARIBAS, HSBC and UBS are acting as Joint Global
Coordinators and Joint Bookrunners for the Offering.
The person responsible for arranging the release of this
announcement is Ruth Pavey, Company Secretary.
Enquiries:
Capital & Counties Properties PLC
+44 (0)20 3214
Ian Hawksworth Chief Executive 9188
+44 (0)20 3214
Situl Jobanputra Chief Financial Officer 9183
Head of Commercial Finance & Investor +44 (0)20 3214
Sarah Corbett Relations 9165
This press release relates to the disclosure of information that
qualified, or may have qualified, as inside information within the
meaning of Article 7(1) of the EU Market Abuse Regulation.
About Capital & Counties Properties PLC ("Capco")
Capital & Counties Properties PLC is one of the largest
listed property investment companies in central London and is a
constituent of the FTSE-250 Index. Capco's landmark estate at
Covent Garden was valued at GBP2.2 billion (as at 30 June 2020)
where its ownership comprises over 1.2 million square feet of
lettable space. As at the date hereof, Capco owns a 25.2 per cent
shareholding in Shaftesbury PLC. Capco shares are listed on the
London Stock Exchange and the Johannesburg Stock Exchange .
IMPORTANT NOTICE IN RELATION TO THE BONDS
NO ACTION HAS BEEN TAKEN BY THE ISSUER, THE JOINT BOOKRUNNERS OR
ANY OF THEIR RESPECTIVE AFFILIATES THAT WOULD PERMIT AN OFFERING OF
THE BONDS OR POSSESSION OR DISTRIBUTION OF THIS PRESS RELEASE OR
ANY OFFERING OR PUBLICITY MATERIAL RELATING TO THE BONDS IN ANY
JURISDICTION WHERE ACTION FOR THAT PURPOSE IS REQUIRED. PERSONS
INTO WHOSE POSSESSION THIS PRESS RELEASE COMES ARE REQUIRED BY THE
ISSUER AND THE JOINT BOOKRUNNERS TO INFORM THEMSELVES ABOUT, AND TO
OBSERVE, ANY SUCH RESTRICTIONS.
THIS PRESS RELEASE IS NOT FOR DISTRIBUTION, DIRECTLY OR
INDIRECTLY IN OR INTO THE UNITED STATES. THIS PRESS RELEASE IS NOT
AN OFFER TO SELL SECURITIES OR THE SOLICITATION OF ANY OFFER TO BUY
SECURITIES, NOR SHALL THERE BE ANY OFFER OF SECURITIES IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SALE WOULD BE UNLAWFUL.
THIS PRESS RELEASE AND THE OFFERING WHEN MADE ARE ONLY ADDRESSED
TO, AND DIRECTED IN THE UNITED KINGDOM AND MEMBER STATES OF THE
EUROPEAN ECONOMIC AREA (THE "EEA") AT PERSONS WHO ARE "QUALIFIED
INVESTORS" WITHIN THE MEANING OF THE PROSPECTUS REGULATION
("QUALIFIED INVESTORS"). FOR THESE PURPOSES, THE EXPRESSION
"PROSPECTUS REGULATION" MEANS REGULATION (EU) 2017/1129.
SOLELY FOR THE PURPOSES OF THE PRODUCT GOVERNANCE REQUIREMENTS
CONTAINED WITHIN: (A) EU DIRECTIVE 2014/65/EU ON MARKETS IN
FINANCIAL INSTRUMENTS, AS AMED ("MIFID II"); (B) ARTICLES 9 AND 10
OF COMMISSION DELEGATED DIRECTIVE (EU) 2017/593 SUPPLEMENTING MIFID
II; AND (C) LOCAL IMPLEMENTING MEASURES (TOGETHER, THE "MIFID II
PRODUCT GOVERNANCE REQUIREMENTS"), AND DISCLAIMING ALL AND ANY
LIABILITY, WHETHER ARISING IN TORT, CONTRACT OR OTHERWISE, WHICH
ANY "MANUFACTURER" (FOR THE PURPOSES OF THE MIFID II PRODUCT
GOVERNANCE REQUIREMENTS) MAY OTHERWISE HAVE WITH RESPECT THERETO,
THE BONDS HAVE BEEN SUBJECT TO A PRODUCT APPROVAL PROCESS, WHICH
HAS DETERMINED THAT: (I) THE TARGET MARKET FOR THE BONDS IS
ELIGIBLE COUNTERPARTIES AND PROFESSIONAL CLIENTS ONLY, EACH AS
DEFINED IN MIFID II; AND (II) ALL CHANNELS FOR DISTRIBUTION OF THE
BONDS TO ELIGIBLE COUNTERPARTIES AND PROFESSIONAL CLIENTS ARE
APPROPRIATE. ANY PERSON SUBSEQUENTLY OFFERING, SELLING OR RECOMMING
THE BONDS (A "DISTRIBUTOR") SHOULD TAKE INTO CONSIDERATION THE
MANUFACTURERS' TARGET MARKET ASSESSMENT; HOWEVER, A DISTRIBUTOR
SUBJECT TO MIFID II IS RESPONSIBLE FOR UNDERTAKING ITS OWN TARGET
MARKET ASSESSMENT IN RESPECT OF THE BONDS (BY EITHER ADOPTING OR
REFINING THE MANUFACTURERS' TARGET MARKET ASSESSMENT) AND
DETERMINING APPROPRIATE DISTRIBUTION CHANNELS.
THE TARGET MARKET ASSESSMENT IS WITHOUT PREJUDICE TO THE
REQUIREMENTS OF ANY CONTRACTUAL OR LEGAL SELLING RESTRICTIONS IN
RELATION TO ANY OFFERING OF THE BONDS.
FOR THE AVOIDANCE OF DOUBT, THE TARGET MARKET ASSESSMENT DOES
NOT CONSTITUTE: (A) AN ASSESSMENT OF SUITABILITY OR APPROPRIATENESS
FOR THE PURPOSES OF MIFID II; OR (B) A RECOMMENDATION TO ANY
INVESTOR OR GROUP OF INVESTORS TO INVEST IN, OR PURCHASE, OR TAKE
ANY OTHER ACTION WHATSOEVER WITH RESPECT TO THE BONDS.
THE BONDS ARE NOT INTENDED TO BE OFFERED, SOLD OR OTHERWISE MADE
AVAILABLE TO AND SHOULD NOT BE OFFERED, SOLD OR OTHERWISE MADE
AVAILABLE TO ANY RETAIL INVESTOR IN THE EEA OR THE UNITED KINGDOM.
FOR THESE PURPOSES, A RETAIL INVESTOR MEANS A PERSON WHO IS ONE (OR
MORE) OF: (I) A RETAIL CLIENT AS DEFINED IN POINT (11) OF ARTICLE
4(1) OF MIFID II; OR (II) A CUSTOMER WITHIN THE MEANING OF
DIRECTIVE (EU) 2016/97, WHERE THAT CUSTOMER WOULD NOT QUALIFY AS A
PROFESSIONAL CLIENT AS DEFINED IN POINT (10) OF ARTICLE 4(1) OF
MIFID II. CONSEQUENTLY, NO KEY INFORMATION DOCUMENT REQUIRED BY
REGULATION (EU) NO 1286/2014, AS AMENDED (THE "PRIIPS REGULATION")
FOR OFFERING OR SELLING THE BONDS OR OTHERWISE MAKING THEM
AVAILABLE TO RETAIL INVESTORS IN THE EEA OR THE UNITED KINGDOM HAS
BEEN PREPARED AND THEREFORE OFFERING OR SELLING THE BONDS OR
OTHERWISE MAKING THEM AVAILABLE TO ANY RETAIL INVESTOR IN THE EEA
OR THE UNITED KINGDOM MAY BE UNLAWFUL UNDER THE PRIIPS
REGULATION.
IN ADDITION, IN THE UNITED KINGDOM THIS PRESS RELEASE IS BEING
DISTRIBUTED ONLY TO, AND IS DIRECTED ONLY AT, QUALIFIED INVESTORS
(I) WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO
INVESTMENTS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES
AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED
(THE "ORDER") AND QUALIFIED INVESTORS FALLING WITHIN ARTICLE
49(2)(A) TO (D) OF THE ORDER, AND (II) TO WHOM IT MAY OTHERWISE
LAWFULLY BE COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED
TO AS "RELEVANT PERSONS"). THIS PRESS RELEASE MUST NOT BE ACTED ON
OR RELIED ON (I) IN THE UNITED KINGDOM, BY PERSONS WHO ARE NOT
RELEVANT PERSONS, AND (II) IN ANY MEMBER STATE OF THE EEA, BY
PERSONS WHO ARE NOT QUALIFIED INVESTORS. ANY INVESTMENT OR
INVESTMENT ACTIVITY TO WHICH THIS PRESS RELEASE RELATES IS
AVAILABLE ONLY TO (A) RELEVANT PERSONS IN THE UNITED KINGDOM AND
WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS IN THE UNITED KINGDOM
AND (B) QUALIFIED INVESTORS IN MEMBER STATES OF THE EEA.
NO OFFERS OR SALE OF THE BONDS WILL BE MADE IN OR INTO SOUTH
AFRICA.
ANY DECISION TO PURCHASE ANY OF THE BONDS SHOULD ONLY BE MADE ON
THE BASIS OF AN INDEPENDENT REVIEW BY A PROSPECTIVE INVESTOR OF THE
ISSUER'S AND SHAFTESBURY'S PUBLICLY AVAILABLE INFORMATION. NEITHER
THE JOINT BOOKRUNNERS NOR ANY OF THEIR RESPECTIVE AFFILIATES ACCEPT
ANY LIABILITY ARISING FROM THE USE OF, OR MAKE ANY REPRESENTATION
AS TO THE ACCURACY OR COMPLETENESS OF, THIS PRESS RELEASE OR THE
ISSUER'S AND SHAFTESBURY'S PUBLICLY AVAILABLE INFORMATION. THE
INFORMATION CONTAINED IN THIS PRESS RELEASE IS SUBJECT TO CHANGE IN
ITS ENTIRETY WITHOUT NOTICE UP TO THE SETTLEMENT DATE.
EACH PROSPECTIVE INVESTOR SHOULD PROCEED ON THE ASSUMPTION THAT
IT MUST BEAR THE ECONOMIC RISK OF AN INVESTMENT IN THE BONDS OR THE
ORDINARY SHARES TO BE ISSUED OR TRANSFERRED AND DELIVERED UPON
EXCHANGE OF THE BONDS AND NOTIONALLY UNDERLYING THE BONDS (TOGETHER
WITH THE BONDS, THE "SECURITIES"). NONE OF THE ISSUER OR THE JOINT
BOOKRUNNERS MAKE ANY REPRESENTATION AS TO (I) THE SUITABILITY OF
THE SECURITIES FOR ANY PARTICULAR INVESTOR, (II) THE APPROPRIATE
ACCOUNTING TREATMENT AND POTENTIAL TAX CONSEQUENCES OF INVESTING IN
THE SECURITIES OR (III) THE FUTURE PERFORMANCE OF THE SECURITIES
EITHER IN ABSOLUTE TERMS OR RELATIVE TO COMPETING INVESTMENTS.
THE JOINT BOOKRUNNERS ARE ACTING ON BEHALF OF THE ISSUER AND NO
ONE ELSE IN CONNECTION WITH THE BONDS AND WILL NOT BE RESPONSIBLE
TO ANY OTHER PERSON FOR PROVIDING THE PROTECTIONS AFFORDED TO
CLIENTS OF THE JOINT BOOKRUNNERS OR FOR PROVIDING ADVICE IN
RELATION TO THE SECURITIES.
EACH OF THE ISSUER, THE JOINT BOOKRUNNERS AND THEIR RESPECTIVE
AFFILIATES EXPRESSLY DISCLAIMS ANY OBLIGATION OR UNDERTAKING TO
UPDATE, REVIEW OR REVISE ANY STATEMENT CONTAINED IN THIS PRESS
RELEASE WHETHER AS A RESULT OF NEW INFORMATION, FUTURE DEVELOPMENTS
OR OTHERWISE.
Forward-looking statements
This press release contains certain forward-looking statements
about the future outlook of the Issuer. By their nature, any
statements about future outlook involve risk and uncertainty
because they relate to events and depend on circumstances that may
or may not occur in the future. Actual results, performance or
outcomes may differ materially from any results, performance or
outcomes expressed or implied by such forward-looking
statements.
No representation or warranty is given in relation to any
forward-looking statements made by the Issuer or any of the Joint
Bookrunners, including as to their completeness or accuracy. The
Issuer does not undertake to update any forward-looking statements
whether as a result of new information, future events or otherwise.
Nothing in this press release should be construed as a profit
forecast.
[1] Based on Shaftesbury share price of 567 pence as at close on
18 November 2020 and base deal size.
[2] Based on Shaftesbury share price of 567 pence as at close on
18 November 2020 and base deal size.
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END
IODQKLBFBFLXFBF
(END) Dow Jones Newswires
November 19, 2020 02:00 ET (07:00 GMT)
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