MRR Mill Res

 
TIDMMRR 
 
7 April 2015 
 
                           Mill Residential REIT plc 
 
                                (the"Company") 
 
                        Repayment of Related Party Loans 
 
Mill Residential REIT plc (AIM: MRR), the UK's first mainstream, buy-to-let 
REIT specialising in residential property investment, announces that it has 
reached agreement with Mill Group Limited for the early repayment of certain 
loans in consideration for the waiver of 50 per cent. of the interest payable 
on those loans. The two loans will be repaid out of the Company's existing cash 
resources. The Company intends to replace these loans with bank debt in due 
course at a cheaper interest rate. 
 
Full details of these loans aggregating to approximately GBP1.5 million are set 
out in paragraph 10.10 of Part VIII: Additional Information of the Company's 
admission document dated 17 December 2014. 
 
The Company has agreed with Mill Group Limited to repay both the loans in 
return for a 50 per cent. reduction in the interest rate payable since the 
loans were drawn down, resulting in a saving of GBP18,631 during the 2015 
calendar year and a further potential GBP100,000 over the three year life of the 
second loan. 
 
Due to the fact that Mill Group Limited is a subsidiary of Mill Group Holdings 
Limited, an entity ultimately controlled by David Toplas' family trusts, and 
Simon Phillips and Andrew Smith, and each are a substantial shareholder under 
the AIM Rules, the alterations of the terms of the loans constitute related 
party transactions as defined by the AIM Rules. The Independent Directors, 
being Ian Ellis and Brian Norton, having consulted with Sanlam Securities UK 
Limited, the Company's nominated adviser, consider that the alterations of the 
terms of the loans are fair and reasonable insofar as Shareholders are 
concerned. 
 
Ian Ellis, Non-Executive Chairman, commented: "The cash and gearing position of 
the Company is something which the Board continuously monitors. Paying interest 
on borrowed money at six per cent. per annum only to leave the cash on deposit 
account earning virtually no interest does not make financial sense. The first 
loan of GBP840,000 was within a few weeks of its contracted repayment date and 
that raised the question internally whether we needed the second loan of GBP 
667,000 to remain in place and whether Mill Group would accept an early 
repayment of this loan as well and forego earning six per cent. per annum on 
it. We are pleased that a full early repayment has been agreed and interest 
chargeable to date has been halved. Mill Group Limited has also indicated that 
it will be supportive in the event that an appropriate acquisition target is 
identified and as the current portfolio is unleveraged it offers the Company a 
considerable amount of flexibility when targets are found." 
 
For further information please contact: 
 
Mill Residential REIT plc                            020 7930 8600 
David Toplas/Simon Phillips 
 
Sanlam Securities UK (Nominated Adviser and Joint    020 7628 2200 
Broker) 
Virginia Bull/Andrew Wagstaff/Max Bascombe 
 
finnCap Limited (Joint Broker)                       020 7220 0500 
Tom Jenkins 
 
Positive Profile (Financial PR)                      07774 228845 
Henry Gewanter 
 
About Mill Group Residential 
 
Mill Group Residential is an independent specialist residential investment 
manager with a successful track record of more than 20 years. The group's focus 
is on long-term income generation through targeted asset acquisition and active 
management in the residential sector. The private rented sector is a key 
strategic planned area of growth for the group. 
 
Since 1994, Mill Group has demonstrated its expertise in conceiving, building 
and operating social infrastructure and residential property funds. The team 
has managed GBP2.5 billion of assets, including GBP1 billion of residential 
property across a number of successful platforms. 
 
What is a UK-REIT? 
 
In brief, a UK real estate investment trust (REIT) is a company that owns, and 
in most cases, manages income-producing real estate. Modelled after mutual 
funds, REITs provide investors of all types stable income streams, 
diversification and long-term capital appreciation. Rental income of the REIT 
will, in most cases, be exempt from UK taxation. REITs are required to pay out 
90 per cent. of their calculated net exempt income as a special type of 
dividend (known as a property income distribution or PID) to shareholders. In 
turn, shareholders will be subject to tax on those dividends (unless falling 
within certain exemptions such as registered pension schemes or charities). 
 
REITs allow anyone to invest in portfolios of properties the same way they 
invest in other industries i.e. through the purchase of shares in the REIT. In 
the same way shareholders benefit by owning shares in other corporations, the 
shareholders of a REIT earn a share of the income produced through real estate 
investment without actually having to go out and buy or finance property. PIDs 
are therefore subject to taxation as if they are a separate property income 
stream. 
 
REITs also have the advantage of being exempt from corporation tax on most 
property capital gains, which brings various benefits such as having a 
competitive advantage on corporate acquisitions. This benefit can potentially 
be shared with the vendor to increase their post-tax proceeds and reduce the 
REITs purchase price. 
 
In the UK, REITs own many types of commercial real estate, ranging from office 
and apartment buildings to warehouses, hospitals, shopping centres and hotels. 
Mill Residential REIT would be the first REIT focused solely on the mainstream, 
UK residential property market. 
 
 
 
END 
 

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