The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this information is considered to be in the public domain.
12 March 2019
Globalworth Real Estate Investments Limited
("Globalworth" or the "Company")
Publication of Circular and Notice of EGM
Globalworth, the leading office investor in Central and Eastern Europe, announces that an Extraordinary General Meeting ("EGM") of the Company will be held at 11.00 a.m. on 29 March 2019 at Ground Floor, Dorey Court, Admiral Park, St Peter Port, Guernsey, GY1 2HT. This follows the Company's announcement on 11 March 2019, in conjunction with its preliminary financial results for the year ended 31 December 2018, of its intention to raise up to €500 million additional equity capital through the issue of new Shares in the capital of the Company (the "New Shares") at or around the prevailing EPRA NAV per share.
The purpose of the EGM is to ask Shareholders to authorise the Board, as permitted by and in accordance with the Articles, to issue up to 55,000,000 New Shares pursuant to (i) a proposed placing for cash of up to 38,000,000 New Shares (the "Placing"); and (ii) the proposed issue of up to 17,000,000 New Shares to Growthpoint Properties International (Pty) Ltd (or its nominee) ("Growthpoint International") in exchange for Growthpoint International's 21.58 per cent. interest in the Globalworth Poland Real Estate N.V. ("GPRE") (the "GPRE Exchange" and, together with the Placing, the "Proposals").
Further announcements providing details of the Proposals and certain disclosure and confirmation requirements required under the AIM Rules will be published in due course once the terms of the Proposals have been agreed.
Copies of the circular containing the Notice of EGM (the "Circular") will be posted to Shareholders. In addition to containing the Notice of EGM, the Circular also contains an explanation of each resolution being proposed and the recommendation of the Board to vote in favour of each resolution.
Expected timetable
|
2019 |
Publication of the Circular |
13 March |
Latest time and date for submitting online proxy vote for the Extraordinary General Meeting |
11 a.m. on 27 March |
Extraordinary General Meeting |
11 a.m. on 29 March |
A full copy of the Circular will be available here:
https://www.globalworth.com/investor-relations/key-corporate-documents
For further information visit www.globalworth.com or contact:
Enquiries
Andrew Cox Tel: +44 20 3026 4027
Head of Investor Relations & Corporate Development
Jefferies (Joint Broker) Tel: +44 20 7029 8000
Stuart Klein
Panmure Gordon (Nominated Adviser and Joint Broker) Tel: +44 20 7886 2500
Alina Vaskina
Milbourne (Public Relations) Tel: +44 7903 802545
Tim Draper
About Globalworth / Note to Editors:
Globalworth is a listed real estate company active in Central and Eastern Europe, quoted on the AIM-segment of the London Stock Exchange. It has become the pre-eminent office investor in the CEE real estate market through its market-leading positions both in Romania and in Poland, where the Company has a majority shareholding in Globalworth Poland, a pure-play Polish real estate platform listed on the Warsaw Stock Exchange. Globalworth acquires, develops and directly manages high-quality office and logistics/light-industrial real estate assets in prime locations, generating rental income from high quality tenants from around the globe. Managed by nearly 200 professionals across Romania and Poland, the combined value of its portfolio is €2.5 billion, as at 31 December 2018. Over 90% of the portfolio is in income-producing assets, predominately in the office sector, and leased to a diversified array of some 650 national and multinational corporates. In Romania, Globalworth is present in Bucharest, Timisoara and Pitesti, while in Poland its assets span Warsaw, Wroclaw, Lodz, Krakow, Gdansk and Katowice. For more information, please visit www.globalworth.com and follow us on Facebook, Instagram and LinkedIn.
IMPORTANT NOTICE: This announcement has been prepared for the purposes of complying with the applicable laws and regulations of the United Kingdom and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws and regulations of any jurisdiction outside of the United Kingdom. This announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements may be identified by the use of forward-looking terminology, including the terms "targets", "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward looking statements include all matters that are not historical facts and involve predictions. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements reflect the Company's current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Company's business, results of operations, financial position, liquidity, prospects, growth or strategies and the industry in which it operates. Forward-looking statements speak only as of the date they are made and cannot be relied upon as a guide to future performance. Save as required by law or regulation, the Company disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements in this announcement that may occur due to any change in its expectations or to reflect events or circumstances after the date of this announcement.
PROPOSED ISSUE OF UP TO 55,000,000 NEW SHARES
AND
NOTICE OF EXTRAORDINARY GENERAL MEETING
Introduction
On 11 March 2019, the Company announced an intention to raise up to €500 million additional equity capital through the issue of new Shares in the capital of the Company (the "New Shares") at or around the prevailing EPRA NAV per share. The Board is now seeking shareholder authority to issue up to 55,000,000 New Shares pursuant to (i) a proposed placing for cash of up to 38,000,000 New Shares (the "Placing"); and (ii) the proposed issue of up to 17,000,000 New Shares to Growthpoint Properties International (Pty) Ltd (or its nominee) ("Growthpoint International") in exchange for Growthpoint International's 21.58 per cent. interest in the Globalworth Poland Real Estate N.V. ("GPRE") (the "GPRE Exchange" and, together with the Placing, the "Proposals").
Due to considerations under the UK City Code on Takeovers and Mergers (as further described in paragraph 4 below), the GPRE Exchange is conditional upon the Placing and will not proceed unless the Company has raised additional equity capital, with the exact amount to be determined at a later date by the Board. The Placing is not conditional upon completion of the GPRE Exchange.
The New Shares to be issued pursuant to the Proposals represent up to 41.51 per cent. of the Company's existing issued share capital.
The purpose of the Circular is to set out, amongst other things, the background to and the reasons for the Proposals. It also explains why your Board considers that the Proposals are in the best interests of the Company and Shareholders as a whole and, accordingly, recommends that Shareholders vote in favour of the Resolutions contained in the notice of the Extraordinary General Meeting set out at the end of the Circular.
Background to the proposed Placing
Consistent with its strategy since IPO, the Group continues to evaluate a strong pipeline of further high-quality investment opportunities. Currently, the Group has €280 million of acquisitions under exclusivity in Poland, with a blended stabilised acquisition yield of over 7.5 per cent., and is also currently analysing a number of other value accretive acquisitions. This pipeline offers assets with a clear strategic fit in prime locations alongside an attractive income profile, building not only critical mass and providing scale benefits, but also providing further asset management angles and value creation potential. In addition, the Company has a very active development pipeline in Romania, where the Company has an excellent track record of delivering value from such projects.
The Board has determined that it is appropriate for the Company to raise new equity by way of the proposed Placing for cash in order to take advantage of this pipeline of attractive investment opportunities. The proposed Placing will also assist the Company in managing its gearing strategy to a long-term target LTV of below 40 per cent. The Company currently expects to price the New Shares to be issued under the Placing at or around the prevailing EPRA NAV per Share.
In order to issue new ordinary shares as part of the Placing for cash, the Board is therefore seeking shareholder authority to issue up to 38,000,000 New Shares.
Background to the proposed GPRE Exchange
GPRE is a real estate company listed on the Warsaw Stock Exchange. GPRE is active in Poland with a prime focus on the office sector. GPRE owns prime office and mixed-use high-street properties located in the centre or on the main streets of the largest cities in Poland. These buildings generate stable income due to high occupancy rates and long-term contracts with prominent tenants. GPRE's aim is to develop its property portfolio and deliver attractive returns to shareholders both in the form of dividends and capital appreciation through the ongoing asset management of its existing portfolio and through further acquisitions of properties meeting its criteria.
The Company (through a wholly-owned subsidiary) acquired the controlling stake in GPRE in December 2017 following the successful completion of a tender offer (in which it acquired a 67.90 per cent. stake) and the subsequent acquisition of additional stakes in GPRE in June and December 2018, and in January and March 2019. As at the date of the Circular and upon completion of the acquisition of GPRE shares announced by the Company on 11 March 2019, the Company's shareholding in GPRE will be 77.46 per cent.
The Company now intends to acquire Growthpoint International's holding in GPRE of 21.58 per cent., which will be satisfied by the Company issuing up to 17,000,000 New Shares to Growthpoint International pursuant to the proposed GPRE Exchange. The proposed GPRE Exchange will bring the Company's aggregate holding in GPRE to above 99 per cent. The Company may thereafter consider exercising its statutory squeeze-out rights to acquire the remainder of the GPRE shares for cash under the Dutch Civil Code. By doing so, the Company can rationalise its group structure, address commercial considerations that have emerged since the Company acquired its controlling stake in GPRE in December 2017, reduce administration costs, achieve operational synergies and allow the Company to present a simpler equity story to its investors.
In order to effect the GPRE Exchange to acquire Growthpoint International's 21.58 per cent. interest in GPRE's ordinary share capital, the Board is seeking shareholder authority to issue up to 17,000,000 New Shares.
UK City Code on Takeovers and Mergers
The Company expects Growthpoint International to wish to maintain its approximately 29 per cent. ownership in the Company following completion of the Placing and the GPRE Exchange. Accordingly, depending on the size of the Placing, the Company expects Growthpoint International to wish to subscribe for such number of New Shares in the Placing (if any) as would, together with the issue of New Shares to Growthpoint International pursuant to the GPRE Exchange, allow it to maintain such holding level.
The GPRE Exchange is conditional on the completion of the proposed Placing, the minimum quantum of which will be determined by the Board at a later date. Therefore, Growthpoint International will not, at any time, together with any persons acting in concert with it, carry 30 per cent. or more of the voting rights of the Company and be subject to the obligation under the UK City Code on Takeovers and Mergers to make a mandatory offer to all of the remaining shareholders of the Company to acquire their shares.
Related Party Transaction
Further details of the Placing and the GPRE Exchange will be notified in due course once the terms have been agreed.
Under the AIM Rules, a transaction with a related party, such as Growthpoint International, which exceeds a specific percentage in any of the class tests under the AIM Rules is treated as a related party transaction and is subject to certain disclosure and confirmation requirements. The Independent Directors have not been advised whether the terms of the participation of Growthpoint International in the Placing or the GPRE Exchange are fair and reasonable insofar as the Company's shareholders are concerned. Once the terms of the Placing and GPRE Exchange are agreed, any disclosures required under Rule 13 of the AIM Rules will be notified.
Action to be Taken
In order to be in a position to proceed with the issue of New Shares pursuant to the Proposals which will be on a non-preemptive basis, the Board is seeking shareholder approval of the Resolutions contained in the notice set out at the end of the Circular convening an Extraordinary General Meeting of the Company to be held at the registered office of the Company at Ground Floor, Dorey Court, Admiral Park, St Peter Port, Guernsey GY1 2HT, at 11 a.m. on 29 March 2019.
A paper proxy form is not enclosed with the Circular. Shareholders who do not intend to be present at the Extraordinary General Meeting are able to cast their proxy vote online by logging on to www.signalshares.com and following the instructions provided or, in the case of CREST members, by using the CREST electronic proxy appointment service set out in notes 16 and 17 to the Notice of Extraordinary General Meeting, in each case so as to be received by 11 a.m. on 27 March 2019 or, in the case of adjournment, by no later than 48 hours before the time fixed for the holding of the adjourned meeting (excluding any day that is not a business day). A paper copy proxy form can be requested from the registrars, further details of which are set out in notes 7 and 8 to the Notice of Extraordinary General Meeting. If your online proxy vote is not received by the time mentioned above and in accordance with the instructions provided online, it will be invalid. The submission of your proxy vote will not prevent you from attending and voting in person at the Extraordinary General Meeting, or any adjournments thereof, should you wish to do so and should you be so entitled.
Further information
Proposed Resolution 1 in the notice of the Extraordinary General Meeting authorises the Directors to exercise all powers of the Company to issue, grant rights to subscribe for, or to convert any securities into, Shares up to a maximum aggregate of 55,000,000 Shares pursuant to the proposed Placing and GPRE Exchange.
Proposed Resolution 2 in the notice of the Extraordinary General Meeting authorises the Directors to issue, grant rights to subscribe for, or to convert any securities into, up to a maximum aggregate of 55,000,000 Shares for the proposed Placing and GPRE Exchange pursuant to the authority given in proposed Resolution 1 as if the pre-emption provisions of Article 5.1 of the Articles did not apply in respect of such issue or grant.
Certain words and expressions used in this announcement have the meaning given to them in the Definitions section below.
You are advised to read the whole of the Circular and not to rely solely on the information contained in this announcement.
Recommendation
The Directors consider that the Resolutions to be proposed at the Extraordinary General Meeting are fair and reasonable and in the best interests of the Company and its Shareholders as a whole.
Accordingly, the Directors unanimously recommend that Shareholders vote in favour of the Resolutions as they intend to do so in respect of their personal shareholdings, representing in aggregate 25,703,002 Shares, representing approximately 18.95 per cent. of the Company's issued share capital.
DEFINITIONS
In addition to the terms defined above, the following words and expressions have the meanings set out opposite them in this section that apply throughout this announcement, unless the context otherwise requires:
"AIM" |
the market of that name operated by the London Stock Exchange; |
"AIM Rules" |
the AIM Rules for Companies issued by the London Stock Exchange; |
"Articles" |
the articles of incorporation of the Company; |
"Board" or "Directors" |
the board of directors of the Company from time to time; |
"Company" |
Globalworth Real Estate Investments Limited; |
"CREST Manual" |
the compendium of documents entitled CREST Manual issued by EUI from time to time and comprising the CREST Reference Manual, the CREST Central Counterparty Service Manual, the CREST International Manual, CREST Rules, CCSS Operations Manual and the CREST Glossary of Terms; |
"EPRA" |
European Public Real Estate Association; |
"EPRA NAV" |
net asset value calculated in accordance with EPRA's methodology as reported by the Company; |
"GPRE" |
Globalworth Poland Real Estate N.V.; |
"GPRE Exchange" |
the proposed acquisition by the Company of Growthpoint International's 21.58 per cent. interest in GPRE in exchange for approximately 17,000,000 New Shares to be issued by the Company to Growthpoint International; |
"Group" |
the Company and its subsidiaries from time to time; |
"Growthpoint International" |
Growthpoint Properties International (Pty) Ltd (or its nominee); |
"Independent Directors" |
The Directors other than Mr. Sasse, Mr. Muchanya and Mr. Fechter, who are each directors of Growthpoint; |
"London Stock Exchange" |
the London Stock Exchange Group plc; |
"LTV" |
loan-to-value ratio; |
"New Shares" |
up to 55,000,000 new Shares to be issued pursuant to the proposed Placing and the GPRE Exchange; |
"Placing" |
the proposed placing of up to approximately 38,000,000 New Shares to investors; |
"Proposals" |
the proposed Placing and the proposed GPRE Exchange; |
"Resolutions" |
the resolutions to be proposed at the Extraordinary General Meeting and set out in the Notice of Extraordinary General Meeting at the end of the Circular; |
"Shareholders" |
the holders of any shares in the issued share capital of the Company from time to time; and |
"Shares" |
the ordinary shares of no par value in the capital of the Company. |
