TIDMRDI
RNS Number : 8175W
Redefine International PLC
17 November 2017
REDEFINE INTERNATIONAL P.L.C.
("RDI" or the "Company" or the "Group")
(Registered number 010534V)
LSE share code: RDI
JSE share code: RPL
ISIN: IM00B8BV8G91
LEI: 2138006NHZUMMRYQ1745
HOLDING IN INTERNATIONAL HOTEL PROPERTIES LIMITED
INCREASED TO 74.1%
- Earnings and NAV enhancing deal to deliver c.10% yield on
equity at lower leverage -
Redefine International P.L.C., the FTSE 250 income focused UK
REIT, announces that it has increased its shareholding in
International Hotel Properties Limited ("IHL") to 74.1%. Further to
the announcement on 10 November 2017, the Company has today
acquired a further 8,498,652 IHL shares from Redefine Properties
Limited (the "Acquisition"). The Acquisition increases the
Company's shareholding in IHL from 58.9% to 74.1%, with the
remaining 25.9% being held by Tsogo Sun, South Africa's largest
hotel chain. The Acquisition removes Redefine Properties Limited,
the Company's major shareholder, as a shareholder in IHL. The
Company has no further related investments with Redefine Properties
Limited.
The additional IHL shares were acquired on the same terms as the
Scheme of Arrangement, previously announced, and will be settled
through an issuance of 2,496,630 new ordinary shares ("New Shares")
in RDI (representing 0.13% of the current issued share capital) and
a cash payment of GBP7.5 million. This will result in Redefine
Properties Limited holding 559,415,576 shares in RDI, being
29.62%.
Application will be made for these New Shares to be admitted to
the Premium Segment of the Official List and to trading on the
London Stock Exchange's Main Market and to be listed on the JSE
("Admission"). The above Acquisition constitutes a smaller related
party transaction which falls within LR 11.1.10 R of the UK Listing
Rules. Settlement of the Acquisition and Admission of the New
Shares, which will rank pari passu with the existing ordinary
shares in the Company, is expected to occur on 24 November
2017.
Following Admission, the Company's issued share capital will
comprise 1,888,914,697 ordinary shares with one voting right per
share. No shares are held in Treasury. The total number of voting
rights will be 1,888,914,697. This figure may be used by
shareholders as the denominator for the calculations by which they
will determine if they are required to notify their interest in, or
a change to their interest in, the Company under the Disclosure
Guidance and Transparency Rules.
Mike Watters, CEO of RDI commented:
"This opportunistic acquisition enhances our exposure to nine
limited service UK hotel assets with strong trading records and
supports our strategic priority of achieving greater scale through
investing in the right earnings enhancing opportunities.
Our diversified portfolio provides us the ability to invest in
assets with strong property fundamentals across sectors where we
see the best growth prospects. The acquisition is in line with our
hotel strategy, which is centred around well located limited
service hotels. The market outlook for this sector remains positive
and the strong brands represented in this portfolio, including
Holiday Inn Express and Hilton, provide a defensive position in any
economic downturn.
Material cost savings will be generated through the delisting of
IHL and the integration of the hotel assets into our existing hotel
portfolio and REIT status. Furthermore, and in line with our
strategy to reduce leverage, this portfolio is currently financed
at 41.5% to value, which is comfortably below our medium-term
target of between 45.0% and 50.0% loan to value."
For further information:
Redefine International P.L.C.
Mike Watters, Stephen Oakenfull Tel: +44 (0) 20
7811 0100
FTI Consulting
UK Public Relations Adviser
Dido Laurimore, Claire Turvey, Tel: +44 (0) 20
Ellie Sweeney 3727 1000
Instinctif Partners
SA Public Relations Adviser
Frederic Cornet, Lizelle du Tel: +27 (0) 11
Toit 447 3030
Java Capital
JSE Sponsor Tel: +27 (0) 11
722 3050
17 November 2017
Note to editors:
Transaction details
On 26 October 2017, the Company acquired 5.0 million shares in
IHL from Redefine Properties Limited in consideration for the issue
of 12.5 million new RDI shares (representing 0.7% of the Company's
issued share capital). This increased the Company's interest in IHL
from 17.2% to 26.2%.
On 13 November 2017, RDI completed the acquisition of an
additional 29.34% shareholding in IHL, under a scheme of
arrangement and, post implementation of the scheme, a further 3.42%
stake in IHL was acquired from Redefine Properties Limited. A total
of 45.9 million new RDI shares were issued as consideration for the
transactions, representing 2.49% of the Company's issued share
capital. This transaction resulted in the Company's interest in IHL
increasing from 26.2% to a controlling interest of 58.9%.
Today, the Company acquired Redefine Properties Limited's
residual 15.2% holding in IHL on the same terms as offered to
minorities under the scheme of arrangement, taking the Company's
interest to 74.1%.
In total, an additional 56.9% interest in IHL has been acquired
for a total consideration value of GBP31.8 million, and has been
settled through the issuance of 60.9 million new RDI shares
(representing 3.3% of the Company's issued share capital) and a
cash payment of GBP7.5 million.
The overall investment in IHL will be both earnings and NAV
accretive and is expected to deliver a yield on equity of over
10%.
IHL portfolio
The IHL portfolio comprises nine good quality UK hotels which
were last valued in February 2017 at GBP104.4 million. The nine
hotels complement RDI's existing hotels portfolio.
Four of the hotels, valued at GBP29.0 million, are let on long
term leases to Travelodge with an effective average unexpired lease
term of over 20 years. The Travelodge portfolio reflects a net
initial yield of 5.3% and benefits from five yearly uncapped CPI
escalations providing attractive rental growth prospects in a
higher inflationary environment.
The remaining five hotels, valued at GBP75.4 million, will be
managed by the Company's associate RedefineBDL Hotel Group
("RBDL"), of which four hotels are franchised to Holiday Inn
Express and one to Hampton by Hilton. The hotels have a strong
trading record and provide exposure to the Hampton by Hilton at
Gatwick airport, which is integrally linked to the airport terminal
building, and the Holiday Inn Express, Edinburgh which has shown
strong growth since acquisition. The five franchised hotels are
anticipated to deliver an effective net initial yield of over
7.5%.
About RDI
RDI is a FTSE 250 UK Real Estate Investment Trust (UK-REIT)
committed to becoming the UK's leading income focused REIT. The
Company's income-led business model and strategic priorities are
designed to offer shareholders superior, sustainable and growing
income returns, with a target growth in underlying earnings per
share of 3%-5% across the medium term.
Income sustainability is underpinned by a diversified portfolio
and tenant base, with no overreliance on any one sector or tenant,
together with an efficient capital structure. The secure and
growing income stream is 39% indexed and has a WAULT of 7.4 years
to first break (8.5 years to expiry). This is complemented by an
average debt maturity of 7.3 years of which over 90% of interest
costs are either fixed or capped. The Company is focused on all
aspects impacting shareholder distributions and reports one of the
lowest cost ratios in the industry whilst maintaining a low cost of
debt. All figures as at 31 August 2017.
The Company owns properties independently valued at GBP1.5bn in
the United Kingdom and Germany, Europe's two largest and most
transparent property markets. RDI invests in assets with strong
property fundamentals spread across UK shopping centres, UK retail
parks, UK offices, UK logistics, UK hotels and German retail.
RDI holds a primary listing on the London Stock Exchange and a
secondary listing on the Johannesburg Stock Exchange and is
included within the FTSE 250, EPRA and GPR indices.
For more information on RDI, please refer to the Company's
website www.redefineinternational.com.
About RedefineBDL Hotel Group ("RBDL")
RDI has a 30.4% holding in RBDL, the UK's leading independent
hotel management company and, following the Acquisition, RBDL will
operate 13 of the Company's 18 hotel assets.
RBDL has an annual turnover under management in excess of GBP350
million, and manages 11,000 rooms across 75 branded and private
label hotel properties, working in partnership with five of the
most prestigious international hotel brands, including IHG, Hilton,
Accor, Marriott and Wyndham.
For more information on RBDL, please refer to the company's
website www.redefinebdl.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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