Results of Firm Placing

THIS ANNOUNCEMENT IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA, NEW ZEALAND, CANADA, THE REPUBLIC OF SOUTH AFRICA, JAPAN OR ANY OTHER JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO.

This announcement is not an offer of securities for sale, or an offer to buy or subscribe for, directly or indirectly, securities to any person in the United States of America or any other jurisdiction, including in or into Australia, New Zealand, Canada, the Republic of South Africa and Japan or any other jurisdiction in which such offer or solicitation is unlawful. This announcement is an advertisement and not a prospectus (or prospectus equivalent document). A prospectus in connection with the proposed firm placing, placing, open offer and offer for subscription (together, the "Capital Raising") (the "Prospectus") and the admission of new ordinary shares of no par value ("New Ordinary Shares") in Regional REIT Limited ("Regional REIT" or the "Company" and, together with its subsidiaries, the "Group") to be issued pursuant to the Capital Raising to listing on the premium listing segment of the Official List of the Financial Conduct Authority ("FCA") and to trading on the Main Market for listed securities of London Stock Exchange plc (together, "Admission") is expected to be published by the Company later today. A copy of the Prospectus will, following publication, be available on the Company's website (www.regionalreit.com) and be available for viewing at the National Storage Mechanism at https://www.morningstar.co.uk/uk/NSM.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

5 December 2017

 

Regional REIT Limited

 

("Regional REIT" or the "Company")

 

Results of Firm Placing

Firm Placing of £50 million and Placing, Open Offer and Offer for Subscription to raise up to £50 million at 101 pence per New Ordinary Share

 

Further to the announcement on 4 December 2017, Regional REIT Limited (LSE: RGL), is pleased to announce the results of its accelerated bookbuild having conditionally raised £50 million under the Firm Placing. The Company is now seeking to raise up to a further £50 million through the Placing, Open Offer and Offer for Subscription. 

Subject to, inter alia, the Resolutions being passed at the Extraordinary General Meeting which is expected to be convened to be held on 19 December 2017, in aggregate, 49,504,950 New Ordinary Shares are to be issued pursuant to the Firm Placing, with up to 49,504,950 New Ordinary Shares to be issued pursuant to the Placing, Open Offer and Offer for Subscription, at an Offer Price of 101 pence per New Ordinary Share, seeking to raise, in aggregate, gross proceeds of up to approximately £100 million (approximately £97 million net of expenses) from the Capital Raising. The Board will have the ability to increase the size of the Issue by up to 25 per cent. should there be sufficient demand.

The 49,504,950 New Ordinary Shares to be issued pursuant to the Firm Placing represent 16.5 per cent. of the Existing Ordinary Shares and the 49,504,950 New Ordinary Shares to be issued pursuant to the Placing, Open Offer and Offer for Subscription represent up to 16.5 per cent. of the Existing Ordinary Shares.

The New Ordinary Shares to be issued pursuant to the Capital Raising will rank pari passu in all respects with the Ordinary Shares currently in issue and will have the right to receive all dividends and distributions declared in respect of issued Ordinary Share Capital of the Company after Admission, including the final top-up dividend, which is expected to be 2.45 pence per Ordinary Share, in respect of the financial year ended 31 December 2017.

Firm Placing

The Company is proposing to raise gross proceeds of £50 million through the Firm Placing of 49,504,950 New Ordinary Shares which will represent approximately 50.0 per cent. of the New Ordinary Shares and approximately 12.4  per cent. of the Enlarged Share Capital.

Peel Hunt and Cenkos, as agents of the Company, have conditionally placed the Firm Placing Shares with institutional and other investors at the Offer Price. The Firm Placing Shares are not subject to clawback and are not part of the Placing, Open Offer and Offer for Subscription. The Firm Placing is subject to the same conditions as the Placing. The terms and conditions of the Firm Placing are as set out in the Company's announcement dated 4 December 2017.

Placing, Open Offer and Offer for Subscription

The Company is proposing to raise gross proceeds of up to approximately £50 million through issuance of 49,504,950 New Ordinary Shares pursuant to the Placing, Open Offer and Offer for Subscription. The New Ordinary Shares to be issued under the Placing, Open Offer and Offer for Subscription will represent up to approximately 50.0 per cent. of the New Ordinary Shares and approximately 12.4  per cent. of the Enlarged Share Capital.

Peel Hunt and Cenkos, as agents of the Company, have agreed to use their reasonable endeavours to place the Placing Shares with institutional and other investors at the Offer Price. The Placing Shares will be subject to clawback to satisfy valid applications by Qualifying Shareholders under the Open Offer. Subject to the satisfaction or, where applicable, waiver of the conditions and the Placing Agreement not having been terminated in accordance with its terms, any Open Offer Shares not subscribed for under the Open Offer may be issued to Placing Placees, with the net proceeds of the Placing being retained by Regional REIT. The terms and conditions of the Placing are as set out in the Company's announcement dated 4 December 2017.

Open Offer Entitlements

Qualifying Shareholders will have the opportunity under the Open Offer to subscribe for New Ordinary Shares at the Offer Price, payable in full on application and free of expenses, pro rata to their existing shareholdings, on the following basis:

1 New Ordinary Share for every 8 Existing Ordinary Shares

held by them and registered in their names at the Record Time. Fractions of New Ordinary Shares will not be allotted and each Qualifying Shareholder's entitlement under the Open Offer will be rounded down to the nearest whole number. Fractional entitlements to New Ordinary Shares will be aggregated and will ultimately accrue for the benefit of the Company.

Qualifying Shareholders are also being offered the opportunity to subscribe for New Ordinary Shares in excess of their Open Offer entitlements pursuant to an Excess Application Facility.

Further details of the Firm Placing and the Placing, Open Offer and Offer for Subscription will be contained in the Prospectus to be sent to shareholders today.

Financial effects of the Capital Raising

Upon Admission, assuming the gross proceeds of the Capital Raising are approximately £100 million, the Enlarged Share Capital of the Company will be up to 399,553,808 Ordinary Shares. This includes 300,543,908 Existing Ordinary Shares, 49,504,950 New Ordinary Shares to be issued pursuant to the Firm Placing and up to 49,504,950 New Ordinary Shares to be issued pursuant to the Placing, Open Offer and Offer for Subscription. On this basis, the Firm Placing Shares will represent approximately 12.4 per cent. of the Enlarged Share Capital and the Open Offer Shares will represent approximately 9.4 per cent. of the Enlarged Share Capital.

Following the issue of the New Ordinary Shares to be allotted pursuant to the Capital Raising:

·      Qualifying Shareholders who take up their full Open Offer Entitlements will suffer a dilution of 15.4 per cent. to their interests in the Company; and

·      Qualifying Shareholders who do not take up any of their Open Offer Entitlements will suffer a dilution of 24.8 per cent. to their interests in the Company.

Extraordinary General Meeting

The Capital Raising will be conditional upon, amongst other things, the Resolutions being passed at the Extraordinary General Meeting of the Company which is expected to take place on 19 December 2017.

A further announcement will be made in due course confirming the publication of the Prospectus relating to the Capital Raising, which will include notice of the Extraordinary General Meeting. Regional REIT Shareholders who hold their Existing Ordinary Shares in certificated form will also receive forms of proxy for voting on the Resolutions and application forms in respect of their Open Offer Entitlements.

Directors' Participations

The Directors are interested in an aggregate of 1,352,549 Existing Ordinary Shares (representing approximately 0.45 per cent. of the Existing Ordinary Shares). Kevin McGrath intends to participate in the Firm Placing and has (in aggregate) agreed to subscribe for 297,029 New Ordinary Shares pursuant to the Firm Placing.

Related Party Transaction

Martin Hughes is a related party of the Company for the purposes of Chapter 11 of the Listing Rules as a result of him having been entitled, during the 12 month period prior to the date of this announcement, to exercise, or to control the exercise of over, 10 per cent. of the votes able to be cast at an extraordinary general meeting of the Company. Martin Hughes, through Toscafund Investments Limited, a private company controlled by Martin Hughes, has agreed to subscribe for up to 6,435,643 New Ordinary Shares under, and on the terms and conditions of, the Firm Placing, which is classified as a smaller related party transaction for the purposes of Chapter 11.1.10R of the Listing Rules.

Unless otherwise defined, capitalised terms used in this announcement shall have the same meanings as set out in the announcement made by the Company on 4 December 2017.

 

Expected timetable of principal events

 

Each of the times and dates in the table below is indicative only and may be subject to change.

Record Time for entitlements under the Open Offer	6.00 p.m. on 1 December 2017
Ex-Entitlements date for the Open Offer	8.00 a.m. on 5 December 2017
Publication and despatch of Prospectus, Form of Proxy, Subscription Forms and, to Qualifying non-CREST Shareholders, Open Offer Application Form	5 December 2017
Open Offer Entitlements and Excess Open Offer Entitlements credited to stock accounts of Qualifying CREST Shareholders in CREST	As soon as possible on 6 December 2017
Recommended latest time for requesting withdrawal of Open Offer Entitlements and Excess Open Offer Entitlements from CREST (i.e. if your Open Offer Entitlements and Excess Open Offer Entitlements are in CREST and you wish to convert them to certificated form)	4.30 p.m. on 13 December 2017
Latest time and date for depositing Open Offer Entitlements into CREST	3.00 p.m. on 14 December 2017
Latest time and date for receipt of Forms of Proxy and receipt of electronic proxy appointments via CREST	11.00 a.m. on 15 December 2017
Latest time and date for splitting of Open Offer Application Forms (to satisfy bona fide market claims only)	3.00 p.m. on 15 December 2017
Latest time and date for receipt of completed Open Offer Application Forms and payment in full under the Open Offer or settlement of relevant CREST instruction (as appropriate). Open Offer Entitlements and Excess Open Offer Entitlements disabled in CREST	11.00 a.m. on 19 December 2017
Latest time and date for receipt of Placing commitments	11.00 a.m. on 19 December 2017
Latest time and date for receipt of completed Subscription Forms in respect of the Offer for Subscription	11.00 a.m. on 19 December 2017
Extraordinary General Meeting	11.00 a.m. on 19 December 2017
Announcement of results of Extraordinary General Meeting	by 7.00 a.m. on 20 December 2017
Results of the Placing and Capital Raising announced through a Regulatory Information Service	by 7.00 a.m. on 20 December 2017
Admission and commencement of dealings in New Ordinary Shares	8.00 a.m. on 21 December 2017
Expected date of despatch of definitive share certificates for Open Offer Shares (to Qualifying non-CREST Shareholders) and new Ordinary Shares under the Offer for Subscription	within 5 Business Days

Notes:

(i)    CREST Shareholders should inform themselves of CREST's requirements in relation to electronic proxy appointments.

(ii)   Subject to certain restrictions relating to Shareholders with a registered address outside the United Kingdom

 

The times and dates set out in the expected timetable of principal events above and mentioned throughout this document are indicative only and subject to change. If any of the times and/or dates change, the revised time and/or date will be notified to the London Stock Exchange, the UKLA and through a Regulatory Information Service.

Different deadlines and procedures may apply in certain cases. For example, Shareholders who hold their Existing Ordinary Shares through a CREST member or other nominee may be set earlier deadlines by the CREST member or other nominee than the times and dates noted above.

 

For further information:

 

Regional REIT Limited Press Enquiries through Headland
Toscafund Asset Management Investment Manager to the Group Adam Dickinson, Investor Relations for Regional REIT Limited	Tel: +44 (0) 20 7845 6100
London & Scottish Investments Limited Asset Manager to the Group Stephen Inglis, Derek McDonald	Tel: +44 (0) 141 248 4155
Peel Hunt Sponsor and Sole Bookrunner Corporate: Capel Irwin, Edward Fox ECM: Alastair Rae, Sohail Akbar	Tel: +44 (0) 20 7418 8900
Cenkos Joint Placing Agent Institutional Sales: Bob Morris, George Fraser Corporate: Alex Collins, Sapna Shah	Tel: +44 (0) 20 7397 8900
Headland Financial PR Francesca Tuckett, Bryony Sym, Jack Gault	Tel: +44 (0) 20 3805 4822

 

 

Important Notices

 

This announcement has been issued by Regional REIT and is the sole responsibility of Regional REIT. The information in this announcement is for background purposes only and does not purport to be full or complete. The material set out herein is for information purposes only and should not be construed as an offer of securities for sale in the United States or any other jurisdiction. The information contained in this announcement is given at the date of its publication (unless otherwise stated) and is subject to updating, revision and amendment. In particular, the proposals referred to herein are tentative and are subject to verification, material updating, revision and amendment.

 

This announcement is not an offer of securities for sale, or an offer to buy or subscribe for, directly or indirectly, securities to any person in the United States of America or any other jurisdiction, including in or into Australia, New Zealand, Canada, the Republic of South Africa and Japan or any other jurisdiction in which such offer or solicitation is unlawful. This announcement is an advertisement and not a prospectus (or prospectus equivalent document). A prospectus in connection with the proposed firm placing, placing, open offer and offer for subscription (together, the "Capital Raising") and the admission of the new ordinary shares of no par value in the Company ("New Ordinary Shares") to be issued pursuant to the Capital Raising to listing on the premium listing segment of the Official List of the Financial Conduct Authority ("FCA") and to trading on the Main Market for listed securities of London Stock Exchange plc (together, "Admission") is expected to be published by the Company later today. A copy of the Prospectus will, following publication, be available on the Company's website (www. regionalreit.co.uk) and be available for viewing at the National Storage Mechanism at https://www.morningstar.co.uk/uk/NSM.

 

The distribution or publication of this announcement, any related documents, and the offer, sale and/or issue of the New Ordinary Shares in certain jurisdictions may be restricted by law. Persons into whose possession any document or other information referred to herein comes are required to inform themselves about and to observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of such jurisdiction.

 

No action has been, or will be, taken by Regional REIT or any other person to permit a public offer or distribution of this announcement, or any related documents, in any jurisdiction where action for that purpose may be required, other than in the United Kingdom.

 

This announcement is not an offer of securities for sale in the United States, and is not for publication or distribution, directly or indirectly, in or into the United States. This announcement is not an offer of securities for sale into the United States. The New Ordinary Shares and the Open Offer Entitlements referred to herein have not been, and will not be, registered under the US Securities Act or any relevant securities laws of any state or other jurisdiction of the United States and, subject to limited certain exceptions, may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, within the United States. No public offering of securities is being made in the United States and the New Ordinary Shares are being offered or sold outside the United States in reliance on Regulation S. The Company has not been, and will not be, registered under the US Investment Company Act of 1940, as amended (the "US Investment Company Act"), and investors will not be entitled to the benefits of that Act. The New Ordinary Shares made available under the Firm Placing and Placing are being offered and sold (i) in the United States only to persons reasonably believed to be (a) qualified institutional buyers (each a "QIB") as defined in Rule 144A under the US Securities Act who are also qualified purchasers ("QPs") as defined in section 2(a)(51) of the US Investment Company Act and (b) accredited investors (each an "Accredited Investor") as defined in Rule 501 of Regulation D under the US Securities Act who are also QPs and, in each such case, in reliance on Section 4(a)(2) of, and Rule 506(b) under, the US Securities Act or pursuant to another exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act; and (ii) outside of the United States to persons who are not US Persons (as defined in Regulation S) in offshore transactions in reliance on Regulation S. For a description of these and certain further restrictions on offers, sales and transfers of the New Ordinary Shares, see Terms and Conditions of the Firm Placing and the Placing.

 

The New Ordinary Shares and the Open Offer Entitlements have not been and will not be registered under the applicable securities laws of Australia, New Zealand, Canada, the Republic of South Africa and Japan. Subject to certain exceptions, the New Ordinary Shares and the Open Offer Entitlements referred to herein may not be offered or sold in Australia, New Zealand, Canada, the Republic of South Africa or Japan or to, or for the account or benefit of, any national, resident or citizen of Australia, New Zealand, Canada, the Republic of South Africa or Japan. There will be no public offer of securities in Australia, New Zealand, Canada, the Republic of South Africa and Japan.

 

The New Ordinary Shares are only suitable for investors who understand the potential risk of capital loss, for whom an investment in the New Ordinary Shares is part of a diversified investment programme and who fully understand and are willing to assume the risks involved in such an investment programme. There is no guarantee that the Capital Raising will proceed and that Admission will occur and you should not base your financial decisions on Regional REIT's intention in relation to the Capital Raising and Admission at this stage. Acquiring New Ordinary Shares to which this announcement relates may expose an investor to a significant risk of losing all of the amount invested. When considering what further action you should take you are recommended to seek your own financial advice immediately from your stockbroker, bank manager, solicitor, accountant, fund manager or other appropriate independent financial adviser duly authorised under the Financial Services and Markets Act 2000 (as amended) ("FSMA"), if you are resident in the United Kingdom, or, if not, from another appropriately authorised independent financial adviser. This announcement does not constitute a recommendation concerning the Capital Raising. The price and value of the New Ordinary Shares may decrease as well as increase. Information in this announcement, past performance and any documents relating to the Capital Raising or Admission cannot be relied upon as a guide to future performance. Potential investors should consult a professional adviser as to the suitability of the Capital Raising for the person concerned.

 

This announcement contains statements which are based on the Directors' current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. These statements include forward-looking statements both with respect to the Group and the markets in which the Group operates. Statements which include the words "expects", "intends", "plans", "believes", "projects", "anticipates", "will", "targets", "aims", "may", "would", "could", "continue" or, in each case, their negative or other variations, and similar statements of a future or forward-looking nature, identify forward-looking statements. It is believed that the expectations reflected in these statements are reasonable, but they may be affected by a number of variables which could cause actual results or trends to differ materially, including (but not limited to) any limitations of Regional REIT's internal financial reporting controls; an increase in competition; an unexpected decline in turnover, rental income or the value of all or part of the Group's property portfolio; legislative, fiscal and regulatory developments; and currency and interest rate fluctuations. Each forward-looking statement speaks only as of the date of this announcement. Except as required by the rules of the FCA (and, in particular, the Disclosure Guidance and Transparency Rules and the Market Abuse Regulation), the London Stock Exchange, the Listing Rules or by law (in particular, FSMA), Regional REIT expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this announcement to reflect any change in Regional REIT's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. All subsequent written and oral forward-looking statements attributable to any person involved in the preparation of this announcement or to persons acting on Regional REIT's behalf are expressly qualified in their entirety by the cautionary statements referred to above and contained elsewhere in this announcement.

 

By their nature, forward-looking statements involve known and unknown risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. The Group's actual results of operations, financial condition, prospects, growth, strategies and dividend policy, and the development of the industry in which it operates, may differ materially from the impression created by the forward-looking statements contained in this announcement. In addition, even if the results of operations, financial condition, prospects, growth, strategies and the dividend policy of Regional REIT, and the development of the industry in which it operates, are consistent with the forward-looking statements contained in this announcement, those results or developments may not be indicative of results or developments in subsequent periods.

 

Any forward-looking statement contained in this announcement based on past or current trends and/or activities of the Group should not be taken as a representation that such trends or activities will continue in the future. No statement in this announcement is intended to be a profit forecast or to imply that the earnings of the Group for the current year or future years will necessarily match or exceed the historical or published earnings of the Group.

 

Each of Peel Hunt and Cenkos and their respective affiliates, expressly disclaims any obligation or undertaking to update, review or revise any forward-looking statement contained in this announcement whether as a result of new information, future developments or otherwise.

 

Peel Hunt is authorised and regulated by the FCA in the United Kingdom. Peel Hunt is acting exclusively for Regional REIT and no-one else in connection with the Capital Raising, and will not regard any other person as its client in relation to the Capital Raising, and will not be responsible for providing the protections afforded to Peel Hunt clients, nor for giving advice in relation to the Capital Raising, or any arrangement referred to in, or information contained in, this announcement.

 

Cenkos, which is authorised and regulated by the FCA in the United Kingdom, is acting exclusively for Regional REIT in connection with the Capital Raising and will not be responsible to anyone other than Regional REIT for providing the protections afforded to clients of Cenkos or for providing advice in relation to the matters described in this announcement.

 

In connection with the Capital Raising, each of Peel Hunt and Cenkos, or any of their respective affiliates, may take up a portion of the New Ordinary Shares and/or related instruments in connection with the Capital Raising as a principal position and in that capacity may retain, purchase, sell, offer to sell for their own account(s) such New Ordinary Shares and/or related instruments in connection with the Capital Raising or otherwise. Accordingly, references in the Prospectus, once published, to the New Ordinary Shares being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by Peel Hunt and Cenkos, or any of their respective affiliates, acting as investors for their own accounts. Except as required for legal or regulatory obligations to do so, Peel Hunt and Cenkos do not propose to make any disclosure in relation to the extent of any such investments or transactions. 

 

None of Peel Hunt and Cenkos, any of their respective affiliates, or any of their or their affiliates' respective directors, officers or employees, advisers or agents accepts any responsibility or liability whatsoever for the contents of this announcement, or no representation or warranty, express or implied, is made as to the accuracy, completeness, correctness or fairness of the information or opinions contained in, this announcement or any document referred to in this announcement (or whether any information has been omitted from this announcement or any document referred to in this announcement) or any other information relating to Regional REIT or their respective subsidiaries or affiliates, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of the announcement or its contents or otherwise arising in connection therewith. Accordingly, each of Peel Hunt and Cenkos, their respective affiliates, and each of their and their affiliates' respective directors, officers, employees and agents, and any other person acting on their behalf, expressly disclaims any and all liability whatsoever for any loss howsoever arising from, or in reliance upon, the whole or any part of the contents of this announcement, whether in tort, contract or otherwise which they might otherwise have in respect of this announcement or its contents or otherwise arising in connection therewith.

 

The contents of this announcement are not to be construed as legal, financial or tax advice. Each prospective investor should consult his own legal adviser, financial adviser or tax adviser for legal, financial or tax advice, respectively.