EUROCASTLE INVESTMENT
LIMITED
NOT FOR RELEASE, PUBLICATION OR
DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR
INTO CANADA OR JAPAN OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL
TO DISTRIBUTE THIS ANNOUNCEMENT
Contact:
International Administration Group (Guernsey) Limited
Company Administrator
Attn: Mark Woodall
Tel: +44 1481
723450
Eurocastle
Announces Tender Offer to Repurchase up to
€84 million of Ordinary Shares at €10.00 per
Ordinary Share
and
Release Date of the Financial Results for the Nine
Months Ended 30 September 2017
on 21 November 2017
Guernsey. 19 October 2017 - Eurocastle Investment
Limited (Euronext Amsterdam: ECT) ("Eurocastle" or the "Company")
today announces a tender offer (the "Tender
Offer") for the repurchase of up to €84 million of ordinary
shares in the Company ("Ordinary Shares") for
a fixed price of €10.00 per Ordinary Share. A circular (the
"Circular") to shareholders in relation to the
Tender Offer has been posted on the Investor Relations section of
the Company's website under the tab "Periodic Reports and
Shareholder Communications - Tender Offer".
The Tender Offer is being undertaken pursuant to
the authority passed at the Company's Annual General Meeting held
on 21 June 2017. The Tender Offer will remain open until 11.59 p.m.
(ET) on 16 November 2017 and is being made at a price of €10.00 per
existing Ordinary Share in issue (the "Tender
Price"). The repurchase of Ordinary Shares by the Company
pursuant to the Tender Offer will be carried out through ABN AMRO
Bank N.V. acting for and on behalf of the Company as agent.
This announcement contains inside information and
is disclosed in accordance with the Company's obligations under the
Market Abuse Regulation (EU) No 596/2014.
Background
to and reasons for the Tender
Offer
In July 2017, Eurocastle's largest investment,
doBank S.P.A. ("doBank"), successfully
completed its initial public offering ("doBank
IPO") valuing doBank at €704 million, equivalent to
approximately 2.7x Eurocastle's value for this investment
immediately following its acquisition net of distributions received
to date. In conjunction with the doBank IPO, Eurocastle sold 48.8%
of its stake in doBank, receiving approximately €146 million of net
proceeds. Of these proceeds, €62 million represented normalised
funds from operations ("NFFO") which, in line
with the Company's distribution policy, will be considered (along
with corporate expenses and other NFFO realised in cash in the
period) when determining the third quarter dividend[1]. The
remaining €84 million represented a capital return on the original
investment. In light of this exceptional event, the Company's Board
has decided to return these proceeds to investors by way of a
Tender Offer. The Board believes that the Tender Offer represents
the most accretive and expeditious use of these proceeds through
buying back shares at a discount to net asset value ("NAV") and returning capital to investors seeking
liquidity at an attractive premium to the prevailing share price,
while maintaining sufficient cash reserves to make additional
acquisitions into its portfolio.
Company Update
Following the Company's partial sale of its
holding through the doBank IPO, Eurocastle's remaining investments
continue to show solid performance. NFFO for the third quarter 2017
is currently expected to be in the range of €1.12 to €1.14 per
share of which €1.01 per share is attributable to the doBank IPO.
Further, the Company continues to benefit from the remaining 20
million shares it holds in doBank which have traded positively
since the doBank IPO, closing at a price of €10.98 per doBank share
as at 30 September 2017. This positive performance is the primary
driver for an expected increase in the Company's third quarter NAV
in the range of €10.45 per share to €10.55[2] per share,
compared to a NAV of €9.91 per share as at 30 June 2017 (after
adjusting for the distribution of the second quarter dividend and
the additional shares issued in July).
In line with its distribution policy, when
announcing its third quarter results on 21 November 2017 the
Company expects to declare a third quarter dividend.
In accordance with applicable law, any decision of
the Company to declare or pay a dividend remains in all
circumstances a decision to be made by the Board and will be
subject to the fulfilment of certain conditions and legal
requirements - there can be no assurance that any dividend will be
paid at any particular level or at all. Any Ordinary Shares
successfully tendered in the Tender Offer will not, for the
avoidance of doubt, be eligible for any such dividend.
Subsequent to the third quarter, doBank's share
price has appreciated a further 30% to €14.27 per share as at
market close on 18 October 2017 following success in reaching a
preliminary agreement on a new servicing mandate on GBV €8 billion
of non-performing loans which form part of the portfolio originated
by Monte Paschi di Siena that is in the process of being
securitised. Further details can be found on its website
(www.doBank.com) under the Investor Relations section. On a pro
forma basis this appreciation in doBank's share price would
increase the Company's estimated NAV per share for 30 September
2017 to a range of €11.55 per share to €11.65 per share. Adjusted
for the estimated manager incentive compensation (determined
assuming all of its investments are realised in line with the
expected NAV) this would be €10.75 to €10.85 per Ordinary Share
(the "Pro Forma NAV per share").
The Tender Offer
The Tender Price has been set at €10.00 per share,
representing a premium of 8.1% to the volume weighted average
closing price on Euronext Amsterdam of €9.25 per Ordinary Share
over the last month to 18 October 2017 (the latest practicable date
before the publication of this announcement), and a discount of
approximately 7% to the Company's Pro Forma NAV per share as at 30
September 2017.
The Tender Offer will provide shareholders who are
eligible with an opportunity to sell part or all of their Ordinary
Shares and to receive their respective share of the cash which the
Company is seeking to return. The Tender Offer will allow the
Company to broaden the return of cash to include those shareholders
whose Ordinary Shares might not otherwise be purchased by the
Company through a general on-market buyback.
Each eligible shareholder will be entitled to sell
up to 13.75 per cent. of the Ordinary Shares registered in their
respective names on the record date under the Tender Offer, rounded
down to the nearest whole number of Ordinary Shares. This is what
is known as each eligible shareholder's "Basic
Entitlement". All Ordinary Shares validly tendered by eligible
shareholders up to their respective Basic Entitlement will be
accepted and repurchased in full. Tendering shareholders may also
be able to participate in the Tender Offer in excess of their Basic
Entitlement to the extent that other eligible shareholders tender
less than their respective Basic Entitlement, resulting in surplus
Ordinary Shares (known as "Excess Tender Offer
Shares"). Any Excess Tender Offer Shares will be repurchased
from tendering Shareholders pro rata to the amount in excess of
each eligible shareholder's Basic Entitlement so tendered.
The repurchase of Ordinary Shares by the Company
will be carried out on-market through the available systems of
Euronext. The Tender Offer will be financed through the use of the
Company's existing and available cash resources.
The Tender Offer is available to eligible
shareholders outside Canada and Japan in respect of the number of
Ordinary Shares registered in those shareholders' names at 6.00
p.m. (CET) on 16 November 2017.
The formal terms and conditions of the Tender
Offer are set out in the Circular and tender form. The
results of the Tender Offer will be announced on 17 November 2017
and published on the Company's website (www.eurocastleinv.com).
Expected
timetable
|
|
2017 |
Tender Offer
opens...................................................................................... |
|
19 October |
Latest time and date for receipt
of Tender
Forms...................................................................................... |
|
11.59 p.m. (ET) on
16 November |
Record Date for the Tender
Offer............................................................................................ |
|
6.00 p.m. (CET) on
16 November |
Closing Date for the Tender
Offer........................................................................................ |
|
11.59 p.m. (ET) on
16 November |
Announcement of results of the
Tender Offer
............................................................................................... |
|
17
November |
Euroclear Nederland accounts
credited with Tender Offer proceeds and revised holdings of
uncertificated Ordinary Shares (Settlement
Date)....................................................................................... |
|
22 November |
Despatch of cheques for Tender
Offer proceeds for Ordinary Shares held through CREST and for
certificated Ordinary
Shares..................................................................................... |
|
22 November |
Despatch of balance share
certificates for unsold Ordinary Shares and share certificates for
unsuccessful tenders (certificated holders
only)........................................................................................ |
|
22 November |
The above times and dates may be subject to change
and, in the event of such change, the revised times and/or dates
will be notified to shareholders.
Information in
connection with the Tender Offer is available on the Company's
website (www.eurocastleinv.com) or can be
obtained from ABN AMRO Bank N.V., Corporate Broking (telephone
number +31 20 344 2000). If you hold Ordinary Shares in CREST or in
certificated form and have any questions about the procedure for
tendering or you want to request tender forms, CREST payment forms
or for help completing the tender form, please contact the
Company's registrar, Anson Registrars Limited, between 9.00 a.m.
and 5.00 p.m. (GMT) Monday to Friday (telephone number +44 1481
711301).
Release Date of
the Financial Results for the Nine Months Ended 30 September 2017
on 21 November 2017
In addition, the Company announces
that it will release its financial results for the third quarter
ended 30 September 2017 on 21 November 2017 before the market
opens. Management will host an earnings conference call at 2:00
p.m. London time (9:00 a.m. New York time) later that day. All
interested parties are welcome to participate on the live call. You
can access the conference call by dialing first +1-800-215-5243
(from within the U.S.) or +1-330-863- 8154 (from outside of the
U.S.) ten minutes prior to the scheduled start of the call; please
reference "Eurocastle Third Quarter 2017 Earnings Call" or
conference ID number "4446821".
A webcast of the conference call
will be available to the public on a listen-only basis at
www.eurocastleinv.com. Please allow extra time prior to the call to
visit the site and download the necessary software required to
listen to the internet broadcast. A replay of the webcast will be
available for three months following the call. For those who are
not available to listen to the live call, a replay will be
available until 11:59 p.m. New York time on Saturday, 28 December
2017 by dialing +1-855-859-2056 (from within the U.S.) or
+1-404-537-3406 (from outside of the U.S.); please reference access
code "4446821".
About
Eurocastle
Eurocastle Investment Limited is a publicly traded closed-ended
investment company that focuses on investing in performing and
non-performing loans and other real estate related assets primarily
in Italy. The Company is Euro denominated and is listed on Euronext
Amsterdam under the symbol "ECT". Eurocastle is managed by an
affiliate of Fortress Investment Group LLC, a leading global
investment manager. For more information regarding Eurocastle
Investment Limited and to be added to our email distribution list,
please visit www.eurocastleinv.com.
Important
Notice
The Company is organized under the
laws of Guernsey. The Tender Offer described in this press release
will be made pursuant to Guernsey law and in compliance with the
applicable provisions of Section 14(e) of the US Securities
Exchange Act of 1934 (the "Exchange Act"), and
Regulation 14E thereunder. The Tender Offer will be subject to
disclosure and procedure requirements of Guernsey which are
different from those of the United States. The Tender Offer will
not be made pursuant to the provisions of any other law.
Accordingly, the Company and the persons acting in conjunction with
the Company will not procure any further registrations,
authorizations or approvals of the Tender Offer by any security
supervisory authority or similar institutions. The Tender Offer
will be made in the United States by the Company and no one
else.
The Company, certain affiliated
companies and agents and financial advisers may make certain
purchases of, or arrangements to purchase, shares outside the
Tender Offer during the period in which the Tender Offer remains
open for acceptance. If such purchases or arrangements to purchase
are made they will be made outside the United States and will
comply with applicable law, including the Exchange Act.
[1]
Please refer to Company Update below for discussion of the
dividend.
[2]
All estimated NAV numbers included in this announcement reflect the
expected adoption, with effect from 1 July 2017, by the Company of
the amendment to IFRS 10 (Consolidated Financial Statements) which
requires it to report its operating subsidiaries (which act as the
intermediate holding companies of the investment portfolio) at fair
value rather than consolidate them as previously. This change in
accounting policy would have resulted in an increase of €5.1
million in the Company's reported NAV as at 30 June 2017.
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Eurocastle Investment Limited via
Globenewswire
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