TIDMASPL
RNS Number : 3159Z
Aseana Properties Limited
12 May 2023
12 May 2023
Aseana Properties Limited
("Aseana" or the "Company")
Posting of 2022 Annual Report, Notice of Annual General Meeting
and Notice of a General Meeting with a discontinuation
resolution
Aseana Properties Limited (LSE: ASPL), a property developer in
Malaysia, listed on the Main Market of the London Stock Exchange,
announces that its 2022 Annual Report, Notice of Annual General
Meeting and a Notice of a General Meeting with a discontinuation
resolution have been posted to shareholders.
The General Meeting and Annual General Meeting will be held on
Tuesday, 30 May 2023 at 4.00 p.m. and 4.30 p.m. respectively at 1st
Floor, Osprey House, Old Street, St. Helier, Jersey, JE2 3RG,
Channel Islands.
The 2022 Annual Report, Notice of Annual General Meeting and
Notice of a General Meeting can be obtained on the Company's
website at http://www.aseanaproperties.com/ and have been submitted
to the National Storage Mechanism to be made available for public
inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism .
For further information:
Grant Thornton UK LLP
================================= ==================
Philip Secrett / George Grainger +44(0)20 7383 5100
Set out below is a reproduction of the Chairman's letter to
Shareholders which is contained within the Notice of a General
Meeting :
Letter from the Chairman
ASEANA PROPERTIES LIMITED
(Incorporated in Jersey under the Companies (Jersey) Law 1991
(as amended)
with registered number 94592)
Directors: Registered office:
Nicholas John Paris (Chairman) 1(st) Floor Osprey House, Old Street
Thomas Holland Monica Lai Voon Huey St. Helier
Hock Chye Tan Jersey
Helen Siu Ming Wong JE2 3RG
Channel Islands
12 May 2023
Dear Shareholder
RECOMMED PROPOSALS REGARDING THE FUTURE OF THE COMPANY
1 Introduction and background to the Proposals
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, at
shareholder meetings held in 2015, 2018, 2019 and 2021, in
accordance with the Company's articles of association then in
force, the Board put forward resolutions to Shareholders to
determine if the Company should continue in existence.
Most recently, at the general meeting held on 28 May 2021,
Shareholders again voted for the Company to continue in existence,
continuing to operate in accordance with the divestment investment
policy adopted by the Company at the 2015 AGM to enable the
controlled, orderly and timely realisation of the Company's assets,
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").
At that meeting, Shareholders also voted to approve certain
amendments to the Articles requiring a further resolution for
Shareholders to determine whether the Company should continue to be
proposed at a general meeting of the Company to be held in May 2023
(the "2023 Discontinuation Resolution").
The notice of general meeting appended to this circular convenes
that general meeting and this letter seeks to provide you with some
further updates and information in relation to the Company to help
inform your decision on how to vote on the Resolutions which are to
be proposed at the General Meeting.
2 Company update
Divestment Investment Policy
The Company adopted the Divestment Investment Policy in June
2015. In 2022, the Company exited its investment in City
International Hospital and International Healthcare Park located in
Vietnam. There remain five assets still to be sold, namely The RuMa
Hotel and the unsold RuMa residences in Kuala Lumpur, the hotel and
the shopping mall in Sandakan and one plot of undeveloped
beachfront land in Kota Kinabalu. The Net Asset Value of the
Company as at 31 December 2022 was US$67.8 million.
The disposal of the remaining assets in the portfolio has been
slower than anticipated since the last discontinuation vote in
2021, mainly attributed to the global pandemic and the resulting
lockdowns and Movement Control Orders in effect for most of 2020,
2021 and finally lifted in April 2022. Since the lifting of the
Covid restrictions, the recovery in Malaysia from Covid related
restrictions has been slower than expected.
To date, net sale proceeds from disposals have largely been used
to pay down project debts across the portfolio, to fund the
Company's working capital requirements and to finance the
construction of The RuMa Hotel and Residences, which was the
Company's final asset to have been developed and, although the
hotel was technically opened in 2018, handover of all the hotel
units to the hotel operator did not occur until late 2019. As a
result of the previous asset disposals, approximately US$10 million
was also returned to Shareholders via a share buyback conducted in
January 2017.
The Board is aware that Shareholders are eager for a more
expeditious disposal programme and it is this which prompted the
restructuring of the Board and the Company's management
arrangements in 2019 and 2020. With these new arrangements in
place, a new sales strategy was adopted and the Board has
prioritised the divestment of the Company's assets as soon as
possible to ensure that further capital can be returned to
Shareholders.
Since internalising the management and disposal process for the
remaining assets, the Board has revised all of the sale due
diligence processes and marketing documentation for each of the
Company's remaining assets, the result being that there is now
extensive information available in virtual data rooms for qualified
buyers interested in the assets in the portfolio. The Board has
identified those assets which it deems to be of highest priority to
sell, on the basis of those properties being more readily saleable
and that the proceeds of those sales would be sufficient to settle
the Company's most significant debt facilities. The early
settlement of those debt facilities would then enable the Company
to use the disposal proceeds of further asset sales thereafter to
return cash to Shareholders.
The new sales strategy for the Company's assets commenced
externally in mid-September 2019. Since then numerous prospective
investors have been approached and non-disclosure agreements have
been signed with interested buyers in respect of three of the
Company's principal assets and active sale discussions continue on
them. As a result, the Company's two assets in Vietnam were sold in
March 2022.
The Board is working to complete the next asset sales during
2023 and will be pragmatic in its approach. However, there can be
no guarantee that these sales will successfully conclude within
this timeframe. As a result, the Board is not currently able to
provide Shareholders with any indication as to when further capital
distributions can be expected from the Company, but re-iterates
that this is the Board's key objective.
The Board is keen to ensure that valuations of the Company's
assets are reflective of the current market environment and a
review of the value of all of the assets within the portfolio was
undertaken as part of the preparation of the 2022 Accounts. The
portfolio revaluation was being conducted using a number of
external valuers (each a specialist in the relevant market of the
relevant asset).
Debt facilities
The Group currently has, in aggregate, approximately US$32.9
million of outstanding bank loans from two different banking
arrangements which financed The RuMa Hotel and the two properties
in Sandakan. Each loan provides the relevant bank with security
over certain of the Group's assets and the Company has granted
corporate guarantees on the Sandakan loans.
The Board has re-negotiated certain of the Group's loan
facilities in order to amend their scheduled repayment dates to
make them coincide with the expected sale dates of the assets that
they have financed. This process is ongoing.
3 2023 Discontinuation Resolution
Notwithstanding the obligation on the Board to propose the 2023
Discontinuation Resolution pursuant to the Existing Articles, the
Board firmly believes that placing the Company into liquidation
(which could be the result of passing the 2023 Discontinuation
Resolution) would have a significant adverse impact on Shareholder
value for the reasons set out below.
Possible breach of banking covenants
The Company believes that, in the event that the 2023
Discontinuation Resolution is passed, an event of default under the
lending covenants of certain of the Company's facility arrangements
could be triggered. If an event of default is triggered, the
relevant loans would become immediately repayable and this could
result in security given to secure those loans being enforced. This
could lead to the banks foreclosing on the Group's loan facilities
and the Group's remaining assets being disposed of on behalf of the
banks rather than Shareholders at significantly lower prices than
anticipated. Further, this could force the Company to enter into
liquidation due to having insufficient liquid assets to repay the
facilities if proceeds from the security that has been enforced are
insufficient. The Group does not currently have sufficient
available cash to be able to repay the entirety of its loans in the
event they are accelerated.
Impact on asset sale values
The Company may not be able to achieve full value for the
Company's remaining assets if the 2023 Discontinuation Resolution
is passed as prospective buyers may seek a reduction to the prices
at which they are willing to acquire the assets in the knowledge
that (a) the Board would be under pressure to take steps to wind up
the Company as soon as practicable; and/or (b) if the passing of
the 2023 Discontinuation Resolution results in an event of default
under, and acceleration of, a loan secured by the Group's assets,
such security may be enforced and the assets may be realised at a
value lower than that which could be expected to be obtained if the
assets were sold/offered to the market in the Group's ordinary
course of business. Proposals
In light of the severity of the possible consequences for
Shareholder value, the Directors are unanimously recommending that
you vote AGAINST the 2023 Discontinuation Resolution.
Instead, the Board recommends that Shareholders allow the
Company to continue for a further 2 years in order to allow the
divestment strategy to deliver results and sell the majority of the
Company's assets. The Board therefore proposes that the next
discontinuation vote take place at a general meeting to be held in
May 2025.
The Board is clear that enabling the Company to continue to
pursue the Divestment Investment Policy, rather than placing the
Company into liquidation or seeking a "fire sale" of the Company's
portfolio at potentially significantly depressed prices, is in the
best interests of the Company and Shareholders as a whole.
In order to implement this proposal, the Existing Articles will
need to be amended. A blacklined version of the proposed amendment
to the Existing Articles is set out in the Appendix to this
circular. The Existing Articles and the Amended Articles (together
with a comparison document showing the changes between the two) are
available for inspection on the Company's website at
www.aseanaproperties.com and during normal business hours on any
weekday (public holidays excepted) at the registered office of the
Company at 1st Floor, Osprey House, 5-7 Old Street, St. Helier,
Jersey, JE2 3RG, Channel Islands.
The Directors are unanimously recommending that you vote FOR the
resolution to amend the Existing Articles which will allow the
Company to continue until May 2025, which will be proposed as a
special resolution.
4 Additional considerations for Shareholders
In connection with the Proposals, Shareholders should be aware
of the following additional considerations:
-- there can be no guarantee that the result of implementing the
Proposals will provide the returns or realise the capital sought by
Shareholders. The Company's investments are illiquid. Accordingly,
they may be disposed of at a discount to their current valuations.
The eventual disposal price of the Company's remaining assets is
unknown and it is possible that the Company may not be able to
realise some investments at any value; and
-- 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, subject to
applicable Jersey law. Shareholders will therefore have little
certainty as to when their capital will be returned. Distributions
pursuant to the orderly realisation programme are subject, amongst
other things, to the Board being able to give the necessary
declaration(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. Returns of cash may also in certain
circumstances be subject, amongst other things, to the Company
obtaining the consent of one or more lenders to the Group.
5 General Meeting
The implementation of the Proposals is conditional on the
outcome of the votes cast by Shareholders in connection with the
Resolutions to be proposed at the General Meeting. A notice
convening the General Meeting, which is to be held at 4 p.m. on 30
May 2023, is set out at the end of this document.
At the General Meeting, Resolution 1 (the 2023 Discontinuation
Resolution) will be proposed as an ordinary resolution and will
require a vote in favour by Shareholders holding a majority of the
Shares represented at the General Meeting, either in person or by
proxy, and voting on Resolution 1, to be validly passed. The
Directors are unanimously recommending that you vote AGAINST
Resolution 1.
Resolution 2 (the proposed amendment to the Existing Articles to
allow the Company to continue until May 2025) will be proposed,
conditional on the failure of Resolution 1 (the 2023
Discontinuation Resolution), as a special resolution and will
require a vote in favour by Shareholders holding not less than two
thirds of votes cast in order to be validly passed. The Directors
are unanimously recommending that you vote FOR Resolution 2.
Action to be taken by Shareholders
Shareholders are strongly encouraged to exercise their votes on
the matters of business at the General Meeting, either by attending
the meeting in person or by submitting a proxy appointment and
giving voting instructions as set out on the Form of Proxy. We also
encourage the submission of questions to us in writing in advance
of the General Meeting and, where appropriate, those questions, and
our answers to them, will be published on our website
https://www.aseanaproperties.com following the General Meeting.
6 Directors' 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 you vote
(1) AGAINST Resolution 1 (the 2023 Discontinuation Resolution) to
be proposed at the General Meeting and (2) FOR Resolution 2 (to
amend the Existing Articles).
Yours faithfully
Nicholas John Paris
Chairman
for and on behalf of
Aseana Properties Limited
Set out below is a reproduction of the explanation of the
business we will consider at the AGM which is contained within the
Notice of Annual General Meeting:
Notice is hereby given that the Annual General Meeting of the
Shareholders of Aseana Properties Limited (the "Company") will be
held at 1st Floor, Osprey House, Old Street, St. Helier, Jersey,
JE2 3RG, Channel Islands on
Tuesday, 30 May 2023 at 4:30pm for the following purposes:
Ordinary business
1. To receive and consider the Company's Audited Financial
Statements, together with the Reports of the Directors and the
Auditor for the financial year ended 31 December 2022.
2. To re-elect Monica Lai, who retires by rotation, as a Director.
3. To re-elect Nicholas John Paris as a Director.
4. To elect Hock Chye Tan, who was appointed by the Board on 3 March 2023, as a Director.
5. To re-appoint PKF Littlejohn LLP as Auditor to hold office
from the conclusion of this meeting until the conclusion of the
next annual general meeting of the Company.
6. To authorise the Directors to determine the Auditor's remuneration.
Special business
7. To consider and, if thought fit, to pass the following
resolution which will be proposed as a special resolution:
"THAT the Company be and is hereby generally and unconditionally
authorised for the purposes of Articles 55 and 57 of the Companies
(Jersey) Law 1991 (as amended) to make one or more purchases on the
Main Market operated by the London Stock Exchange plc, of its own
Ordinary Shares provided that:
(a) the maximum aggregate number of Ordinary Shares hereby
authorised to be purchased is 29,783,780 (representing
approximately 14.99 per cent. of the Company's issued ordinary
share capital (excluding ordinary shares held in treasury));
(b) unless a tender offer is made to all holders of Ordinary
Shares, the maximum price to be paid per Ordinary Share must not be
more than the higher of:
(i) 105 per cent. of the average of the middle market quotations
for an Ordinary Share taken from the London Stock Exchange's Main
Market for listed securities for the five Business Days immediately
preceding the date of repurchase; or
(ii) the higher of the price of the last independent trade and
the highest current bid on the trading venues where the purchase is
carried out;
(c) the minimum price to be paid per Ordinary Share must not be
less than US$0.05 or the Sterling equivalent;
(d) unless otherwise renewed, varied or revoked, the authority
hereby conferred shall expire on the later of (i) 12 months from
the date of passing of this resolution; and (ii) the Company's
Annual General Meeting in 2024; and
(e) the Company may make a contract or contracts to purchase the
Ordinary Shares under the authority hereby conferred prior to the
expiry of such authority which will or may be executed wholly or
partly after the expiry of such authority and may make a purchase
of the Ordinary Shares in pursuance of any such contract or
contracts."
8. To consider and, if thought fit, to pass the following
resolution which will be proposed as an ordinary resolution:
"THAT, subject to the provisions of its Articles of Association,
the Company be and is hereby generally and unconditionally
authorised for the purposes of Article 58A of the Companies
(Jersey) Law 1991 (as amended) to hold any Ordinary Shares
repurchased under the share buyback authority set out above as
treasury shares."
by order of the Board of Directors of
Aseana Properties Limited
ICECAP (Secretaries) Limited
Secretary to the Company
Dated: 12th May 2023
Registered Office Address:
1(st) Floor, Osprey House, Old Street, St. Helier, Jersey, JE2
3RG, Channel Islands
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