TIDMPILR
RNS Number : 6804O
Pacific Industrial & Log REIT PLC
09 November 2016
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT ARE NOT
FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY,
IN WHOLE OR IN PART, IN OR INTO OR FROM ANY JURISDICTION WHERE TO
DO SO MIGHT CONSTITUTE A VIOLATION OF LOCAL APPLICABLE SECURITIES
LAWS OR REGULATIONS
Pacific Industrial & Logistics REIT plc
("Pacific Industrial & Logistics", the "Company" or the
"Group")
Placing and Subscription to raise GBP11,124,300
Appointment of New Directors
Declaration of Interim Dividend
Redemption of Preference Shares
and
Posting of Circular and Notice of General Meeting
Pacific Industrial & Logistics REIT plc (AIM:PILR), a
specialist Real Estate Investment Trust focused on smaller lot size
industrial and logistics properties, is pleased to announce a
conditional equity placing by finnCap and Radnor Capital Partners
of 11,124,300 new ordinary shares of 1p each ("Ordinary Shares") on
behalf of the Company by way of a placing and subscription (the
"Placing and Subscription").
HIGHLIGHTS
-- Placing and Subscription of 11,124,300 new Ordinary Shares at
a price of 100 pence per Ordinary Share (the "Issue Price"),
raising gross proceeds of GBP11.1 million;
-- The proceeds of the Placing and Subscription will primarily
be used to fund future acquisitions and reduce gearing to
c.45%;
-- Appointment of Mr. Nigel Rich CBE as non-executive chairman,
formerly Chairman of Segro plc, and Mr. Mark Johnson, the CEO and
co-founder of Pacific Investments with Sir John Beckwith, as a
non-executive director, both with effect from 1 January 2017;
-- Declaration of interim dividend of 3.0 pence per Ordinary Share;
-- Placing and Subscription is conditional upon (among other
things) shareholder approval; and
-- Circular to shareholders in relation to the Placing and
Subscription to be despatched later today.
Richard Moffitt, CEO of Pacific Industrial & Logistics,
commented:
"We are pleased to report that the Company has conditionally
raised GBP11.1 m of equity capital from predominantly new and some
existing investors, validating the investment strategy employed by
the Company. This additional capital will provide the Company with
further liquidity and a more diversified Shareholder base. We will
now work to rapidly deploy the funds raised by acquiring quality
assets from our pipeline."
"I would like to welcome Nigel Rich and Mark Johnson to the
Board, who join on 1 January 2017. With extensive public market and
property sector experience between them we are excited by the
contribution they will make to Pacific Industrial &
Logistics."
GENERAL MEETING
A circular will be sent to shareholders today giving notice of a
general meeting of Pacific Industrial & Logistics (the
"Circular") to be held at 11.00 a.m. (London time) on 25 November
2016 (the "General Meeting") at the offices of Gowling WLG (UK)
LLP, 4 More London Riverside, London SE1 2AU. A copy of the
Circular will shortly be available on the Company's website
www.pacificil.com.
INTERIM DIVID TIMETABLE
The Directors have proposed paying an interim dividend of 3.0
pence per Ordinary Share in relation to the period from
incorporation to 30 September 2016. The interim dividend will be
paid by no later than 23 December 2016 to qualifying Shareholders
on the register at the close of business on 25 November 2016 (which
excludes, for the avoidance of doubt, any Ordinary Shares to be
issued pursuant to the Placing and Subscription). The ex-dividend
date will be 24 November 2016.
At the time of the Company's admission to AIM, the Company
stated that it intended to declare dividends on a half-yearly basis
in March and September, subject to its loan-to-value being 50 per
cent. or less. Accordingly, the Directors reserve the right to
withdraw the interim dividend should the completion of the Placing
and/or Subscription not take place and/or the loan-to-value is
greater than 50 per cent. following the reduction of the Group's
debt facility. The Interim Dividend will be paid in full as a REIT
property income distribution in respect of the Group's tax exempt
property rental business.
DIRECTOR APPOINTMENTS
The Board is pleased to announce that, on 1 January 2017: (i)
Mr. Nigel Rich CBE will be appointed as non-executive chairman of
the Company; and (ii) Mr. Mark Johnson, the co-founder of Pacific,
will be appointed as a non-independent non-executive director of
the Company. At the same time, Jonathan Gray will step down as
chairman but shall continue to serve as a non-executive director of
the Company.
Mr. Nigel Rich CBE
Nigel brings a wealth of Board experience, having operated
across the globe in senior positions, most recently at Segro plc.
Nigel served as the Chief Executive Officer of Trafalgar House from
1994 to 1996 and previously spent 20 years at the Jardine Matheson
Group in Asia, serving as its Chief Executive from 1989 to 1994 and
as a Managing Director of Jardine Matheson Holdings from 1989 to
1994. Nigel has served as the Chairman of the Board at Hamptons
International and as the Chairman of the Board of Segro plc from
October 2006 until April 2016. He was a Director of Xchanging B.V.
and then Deputy Chairman of Xchanging UK. He served as a Non
-Executive Director of KGR Absolute Return PCC, Castle Asia
Alternative PCC Ltd. and Matheson & Co. He has also served as a
Member of The Takeover Panel (UK). Nigel holds a CA from the
Institute of Chartered Accountants of England and Wales. Nigel will
join the audit, management engagement and valuation committees.
Mr. Mark Johnson
Mark Johnson is the CEO of Pacific which he co-founded in 1994
with Sir John Beckwith. Mark qualified as a lawyer before working
in corporate finance at Barclays Merchant Bank and Barclays de
Zoete Wedd. He was CEO of the Riverside Group, one of the UK's
leading leisure companies, under the chairmanship of Sir John. Mark
is (and was) a founding partner and shareholder/director of
Pacific's investment portfolio and private equity companies,
including Liontrust, Thames River Capital, River & Mercantile,
Argentex and Pacific Asset Management. Mark has worked with Sir
John for over 20 years. Mark will join the valuation committee.
For further information regarding Pacific Industrial &
Logistics REIT plc please call:
Pacific Industrial & Logistics
REIT Plc
Richard Moffitt +44 (0) 207 591
CEO 1600
finnCap - Nominated Adviser
and Broker
Stuart Andrews/ Grant Bergman/
Giles Rolls
Corporate Finance
Christian Hobart +44 (0)20 7220
Corporate Broking 0500
Radnor Capital Partners -
Capital Advisory +44 (0)20 7073
Tom Durie / Joshua Cryer 7860
The information communicated in this announcement is inside
information for the purposes of Article 7 of Regulation
596/2014.
Defined terms used but not defined in this announcement have the
meaning set out in the circular.
Background to, and reasons for, the Placing and the
Subscription
On 7 October 2016 the Company announced that the gross asset
value of the Company increased by 10.7 per cent. from GBP27 million
at acquisition to GBP29.9 million, delivering a return on
investment of c.24 per cent. from a 100 pence issue price to 123.87
pence Adjusted Net Asset Value per Ordinary Share as at 30
September 2016 (which excludes, for the avoidance of doubt, the
payment of the Interim Dividend). The Company has significantly
exceeded expectations since IPO through upward-only rent reviews
and active asset management in a sector that continues to benefit
from strong fundamentals post-EU referendum.
The Directors believe that the Placing and the Subscription have
the following principal benefits for Shareholders:
-- provides additional capital which will enable the Company to
benefit from its current pipeline;
-- increases the number of Ordinary Shares in issue, which may
provide Shareholders with additional liquidity and the Company with
a more diversified Shareholder base; and
-- enlarges the Company, thereby spreading operating costs over
a larger capital base, which should reduce the Company's total
expense ratio.
Portfolio update, pipeline and market outlook
Portfolio update
The Company completed its successful IPO and acquisition of the
Initial Portfolio in April 2016. Working in conjunction with the
tenants of the Initial Portfolio, and in line with their strategy,
the Company's management team has carried out the following asset
management activities: (i) signed a rent review memorandum and
lease extension with one tenant in Bedford at a market leading
local rent of GBP6 psf., increasing the annual rent psf. by 38 per
cent.; (ii) introduced new lease terms on a leasehold property
allowing for the build out and use of the existing property as a
retail outlet; and (iii) signed a new long lease following a full
refurbishment by a tenant in Bedford.
The Board commissioned an independent valuation report from
CBRE. The gross asset value increased by 10.7 per cent. from GBP27
million at purchase to GBP29.9 million, delivering a return on
investment of c.24 per cent. from a 100 pence issue price to 123.87
pence Adjusted Net Asset Value per Ordinary Share as at 30
September 2016 (which excludes, for the avoidance of doubt, the
payment of the Interim Dividend). Management believe there is
further significant upside for the Initial Portfolio.
Pipeline
The Company is currently engaged in various stages of
negotiations on potential acquisitions that meet the investment
objective and investing policy. The management team believe these
assets are complementary to the existing portfolio of the Company
with low capital values in well positioned logistical locations.
The Company expects to have invested the net proceeds of the
Placing and the Subscription by the first quarter of 2017.
The acquisition of any potential investments by the Company is
subject, among other things, to the Company completing satisfactory
due diligence and the approval of the Directors. Any such
acquisitions will also be subject to agreement having been reached
between the Company, the Manager and the relevant counterparty as
to the terms of such acquisitions. There can be no assurance that
any potential investments will be purchased by the Company.
Market outlook
There has been considerable commentary in the press on the
commercial property sector as a whole. The sub sector that the
Company operates in, industrial and logistics, has shown little
change since the EU referendum in the view of the Directors, and
the Directors are aware of a number of transactions closing at
pre-referendum valuations.
The Directors believe that this sector remains less vulnerable
than other real estate sectors as consumers continue to migrate
online and demand for logistics remains high. With growing demand
from consumers who continue to rely on e-commerce, companies have
to adapt their strategies. Supply in key locations across the
Midlands, and other regional locations, remains constrained and
development opportunities are limited.
The Directors have identified a strong pipeline of attractive
assets that are complementary to the Company's existing portfolio
and located in key logistical locations. The Board believes these
assets present the Company with a good opportunity to grow its
portfolio in the coming months, subject to the necessary
financing.
Redemption of Preference Shares
In order to provide the Group with medium term funding at the
time of the IPO, affiliates of Pacific subscribed for, in
aggregate, 2 million Preference Shares at GBP1.00 per Preference
Share. The Preference Shares are entitled to a 6 per cent.
cumulative dividend payable on redemption and are redeemable at any
time over a period of 18 months from the IPO.
Taking into account the net proceeds of the Placing and the
Subscription, the Board believes it is in the best interests of
Shareholders to redeem all of the Preference Shares following
completion of the Placing and the Subscription. Accordingly,
immediately following completion of the Placing and the
Subscription, the Board intends to serve a compulsory redemption
notice on the holders of Preference Shares in accordance with the
articles of association of the Company at c.GBP1.0378 per
Preference Share. Redemption of the Preference Shares is expected
to take place on 28 November 2016. The redemption of the Preference
Shares will be funded from the proceeds of the Placing and the
Subscription.
The redemption of the Preference Shares is a related party
transaction pursuant to the AIM Rules as Sir John Beckwith (the
ultimate beneficial owner of Pacific and its affiliates) is a
substantial shareholder of the Company. The Directors consider,
having consulted with the Company's nominated adviser, finnCap,
that the terms of the redemption of the Preference Shares are fair
and reasonable insofar as the Company's shareholders are
concerned.
The Placing and the Subscription
9,499,300 Placing Shares have been placed with placees at the
Issue Price and subscribers have subscribed for 1,625,000
Subscription Shares at the Issue Price to raise gross proceeds of
c.GBP11.1 million. Neither the Placing nor the Subscription is
underwritten.
The Issue Price represents: (i) a discount of approximately
6.54% per cent. to the closing mid-market price of 107 pence per
Ordinary Share on 8 November 2016 (being the last practical date
prior to the announcement of the Placing and Subscription); and
(ii) a discount of approximately 17.27 per cent. to the prevailing
Adjusted Net Asset Value at 30 September 2016 (being the last
practicable date prior to the announcement of the Placing and the
Subscription), as adjusted to take into account the declaration and
payment of the Interim Dividend.
The Placing and the Subscription is conditional, inter alia, on
the approval of Resolutions 1 and 2 at the General Meeting of the
Company to be held at 11.00 a.m. on 25 November 2016 and upon
Admission of the Placing Shares and the Subscription Shares to
trading on AIM. It is expected that Admission of the Placing Shares
and the Subscription Shares will occur on 28 November 2016.
The Ordinary Shares issued pursuant to the Placing and the
Subscription will, when issued, be credited as fully paid and will
rank pari passu in all respects with the Existing Ordinary Shares
including the right to receive all dividends and other
distributions declared, made or paid after their date of issue.
The Placing Agreement
Pursuant to the terms of the Placing Agreement: (i) finnCap, as
agent for the Company, conditionally agreed to use its reasonable
endeavours to place the Placing Shares on a non-underwritten basis
at the Placing Price; and (ii) Radnor conditionally agreed to use
its reasonable endeavours to introduce potential Placees to
finnCap.
The Placing Agreement contains certain warranties from the
Company and the Manager in favour of finnCap and Radnor in relation
to, inter alia, certain matters relating to the Company and its
business. In addition, the Company and the Manager have agreed to
indemnify finnCap and Radnor in relation to certain liabilities
they may incur in respect of the Placing. finnCap has the right to
terminate the Placing Agreement in certain circumstances prior to
Admission including, without limitation, in the event of a breach
of the Company to comply in any material respect with its
obligations under the Placing Agreement, the occurrence of a force
majeure event or a material adverse change in the financial
condition of the Group. Under the terms of the Placing Agreement
the Company has agreed to pay finnCap a corporate finance fee and
commissions based on the number of Placing Shares which are the
subject of the Placing and a fee to Radnor.
Pacific participation in the Subscription
Pacific, Sir John Beckwith and his affiliates, have agreed to
subscribe for 750,000 Subscription Shares pursuant to the
Subscription. This subscription for Ordinary Shares is a related
party transaction pursuant to the AIM Rules as Sir John Beckwith
(the ultimate beneficial owner of Pacific and its affiliates) is a
substantial shareholder of the Company. The Directors consider,
having consulted with the Company's nominated adviser, finnCap,
that the terms of the subscription by Pacific, Sir John Beckwith
and his affiliates are fair and reasonable insofar as the Company's
shareholders are concerned.
Shareholders should note that, following completion of the
Placing and the Subscription, Pacific, Sir John Beckwith and his
affiliates will be interested in 7,600,000 Ordinary Shares
(representing 35.44 per cent. of the Enlarged Share Capital).
Should any of Pacific, Sir John Beckwith or his affiliates acquire
any further interest in Ordinary Shares (or should any one of them
acquire any interest in Ordinary Shares such that they are
interested in 30 per cent. of more of the voting rights of the
Company), the Takeover Panel may regard this as giving rise to an
obligation upon that member of the Concert Party to make an offer
for the entire issued share capital of the Company at a price no
less than the highest price paid by any of them in the previous 12
months.
Admission and dealings
Application will be made to the London Stock Exchange for the
Placing Shares and the Subscription Shares to be admitted to
trading on AIM. The Placing Shares and the Subscription Shares
will, when issued, rank pari passu in all respects with the
Existing Ordinary Shares, including the right to receive dividends
and other distributions declared following Admission. It is
expected that Admission will become effective and that dealings in
the Placing Shares and the Subscription Shares will commence on 28
November 2016.
Directors' participation in the Subscription
The following Directors are subscribing for Ordinary Shares
pursuant to the Subscription. Their subscription for new Ordinary
Shares is taking place on the same terms and conditions as the
wider Placing.
No. of Ordinary Resulting
Shares subscribed holding % of Enlarged
for pursuant of Ordinary Issued Ordinary
Director to the Subscription Shares Share Capital
Richard Moffitt 50,000 300,000 1.4%
No. of Ordinary Resulting
Shares subscribed holding % of Enlarged
for pursuant of Ordinary Issued Ordinary
Proposed Director to the Subscription Shares Share Capital
Nigel Rich 75,000 75,000 0.3%
Mark Johnson 50,000 150,000 0.7%
The subscription for Ordinary Shares by Richard Moffitt is a
related party transaction pursuant to the AIM Rules. The
independent Directors (being Jonathan Gray and Bruce Anderson)
consider, having consulted with the Company's nominated adviser,
finnCap, that the terms of the subscription by Richard Moffitt are
fair and reasonable insofar as the Company's shareholders are
concerned.
General Meeting
A notice convening the General Meeting to be held at the offices
of Gowling WLG (UK) LLP, 4 More London Riverside, London SE1 2AU,
at 11.00 a.m. on 25 November 2016 is set out at the end of this
document. At the General Meeting, the following Resolutions will be
proposed:
Resolutions relating to the Placing and the Subscription
(Resolutions 1 and 2)
Resolutions 1 and 2 will be proposed to grant the Directors the
authority to allot the Placing Shares and the Subscription Shares
(which are equivalent to approximately 51.88 per cent. of the
Enlarged Share Capital) without first offering them to existing
Shareholders on a pre-emptive basis.
The Directors believe it would not be in the Shareholders' best
interests to incur the significant additional expense that would be
required to implement a fully pre-emptive offer of Ordinary Shares
to Shareholders. The Directors have therefore concluded that
seeking general authority from Shareholders to issue the Placing
Shares and the Subscription Shares other than on a pre-emptive
basis is the most flexible and cost effective method available to
the Company.
Resolutions relating to general authority to allot Ordinary
Shares and waiver of pre-emption rights (Resolutions 3 and 4)
Resolutions 3 and 4 will, if passed, renew the authorities given
to the Directors to allot Ordinary Shares on a non-pre-emptive
basis at the time of the Company's IPO, but reflecting the
increased number of Ordinary Shares comprised in the Enlarged
Issued Share Capital broadly on the same terms as the equivalent
resolution passed at that time. The authority sought under these
Resolutions will expire at the earlier of the conclusion of the
annual general meeting of the Company in 2017 or 30 September
2017.
Intention of Directors and Pacific
The Directors intend to vote in favour of each of the
Resolutions in respect of their aggregate beneficial interest in
respect of 280,000 Ordinary Shares, representing approximately 2.71
per cent. of the Existing Ordinary Shares.
Pacific, Sir John Beckwith and his affiliates intend to vote in
favour of each of the Resolutions in respect of their aggregate
beneficial interest in respect of 6,700,000 Ordinary Shares,
representing approximately 64.93 per cent. of the Existing Ordinary
Shares.
Placing and Subscription Statistics
Issue Price GBP1.00
Number of Placing Shares 9,499,300
Number of Subscription
Shares 1,625,000
Gross proceeds of the GBP11.1 million
Placing and the Subscription
Number of Ordinary Shares
in issue on the date of
this document* 10,317,910
Number of Preference Shares
in issue on the date of
this document 2,000,000
Number of Ordinary Shares
in issue at Admission
of the Placing Shares
and the Subscription Shares* 21,442,210
Number of Warrants in
issue at the date of Admission
of the Placing Shares
and the Subscription Shares* 3,027,000
Number of Preference Shares -
in issue immediately following
Admission of the Placing
Shares and the Subscription
Shares
Placing Shares and Subscription 51.88 per cent.
Shares expressed as a
percentage of the Enlarged
Share Capital*
* Assuming no Warrants are exercised on or before Admission
Expected Timetable
Latest time and date for 11.00 a.m. on 23 November
receipt of Forms of Proxy 2016
Ex-dividend date 24 November 2016
General Meeting 11.00 a.m. on 25 November
2016
Date for Shareholders close of business on 25
to be on register in order November 2016
to receive dividend
Admission of Placing Shares 8.00 a.m. on 28 November
and Subscription Shares 2016
Expected date for CREST 28 November 2016
accounts to be credited
in relation to Placing
Shares and Subscription
Shares
Redemption of the Preference 28 November 2016
Shares
Dispatch of definitive by no later 5 December
share certificates (where 2016
applicable) in relation
to Placing Shares and
Subscription Shares
Dividend payment date by no later 23 December
to qualifying Shareholders 2016
Notes:
Certain of the events in the above timetable are conditional
upon, amongst other things, the approval of the Resolutions at the
General Meeting.
If any of the events contained in the timetable should change,
the revised times and dates will be notified by means of an
announcement through a Regulatory Information Service.
Additional Information
Further details required to be disclosed under Rule 17 of, and
paragraph (g) of Schedule 2 to, the AIM Rules for Mr. Nigel Rich
CBE and Mr. Mark Johnson is as follows:
Mr. Nigel Mervyn Sutherland Rich CBE, aged 71
Mr Rich CBE has held the following directorships and/or been a
partner in the following partnerships within the period of five
years prior to the date of this document:
Current directorships/partnerships Past directorships/partnerships
British Empire Trust PLC Pacific Assets Trust PLC
The Tobacco Pipe Makers Segro plc
and Tobacco Trade Benevolent The R&A Foundation
Fund R&A Trust Company (No.1)
Chelsea Square Garden Limited
Limited R&A Trust Company (No.2)
Matheson & Co.,Limited Limited
Bank of the Philippine
Islands (Europe) PLC
R&A Championships Limited
Xchanging Limited
Mr. Mark Christopher Johnson, aged 58
Mr Johnson has held, other than other companies in the Group,
the following directorships and/or been a partner in the following
partnerships within the period of five years prior to the date of
this document:
Current directorships/partnerships Past directorships/partnerships(1)
Pacific Capital Partners Beckwith Investment Management
Limited Limited
London and Continental River and Mercantile
Partners LLP Group PLC
Pacific Industrial LLP Pacific Venture Capital
Pacific Asset Management LLP (Dissolved)
LLP Law 17151 Ltd (Dissolved)
Mortar Capital Limited Law 17141 Ltd (Dissolved)
MCJ Holdings Limited Tryline Holdings Limited
Argentex LLP (Dissolved)
Pacific Foreign Exchange Imagestate Plc
Ltd Odyssey Venture Partners
Rivercrest Capital LLP Limited
Burlington Global Limited The General Property
Pacific Leisure & Media Investment Company Limited
Limited River and Mercantile
PHL 2 Limited Asset Management LLP
Pacific and York Ltd Roundshield LLP
Pacific Investments Limited Property Capital Partners
Beckwith Capital Investment Europe LLP
Limited
Puma Asset Management
Limited
B@1 Limited
Pacific Healthcare Limited
Pacific Leisure, Entertainment
& Media Limited
Pacific Investments Management
Ltd
Key Rock Developments
Limited
(1) Imagestate Plc entered administration on 13 April 2006 and was dissolved on 15 September 2007.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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