TIDMRAV
RNS Number : 1135F
Raven Property Group Limited
17 March 2022
17 March 2022
Raven Property Group Limited
("Raven", "RPG" or the "Company")
Company Update -arrangements to allow Raven to dispose of the
Russian business to the Russian management team and proposed
cancellation of the listings in the Company's shares
The Board of Raven is deeply saddened by the events in Ukraine
and sincerely hopes for a peaceful resolution as soon as possible.
The events which began on 24 February 2022 and the subsequent
impact of sanctions have made it impracticable for the business to
continue in its current form and the Board announces that it has
entered into an arrangement to allow it to divest itself of its
Russian business to Prestino Investments Ltd, a Cypriot company, to
be owned and controlled by Raven's Russian management team, led by
Igor Bogorodov ("the Transaction"). The Board believes this to be
the most effective way to meet any further sanction and counter
sanction requirements. In light of the Transaction and the matters
set out in this announcement including the conditionality
surrounding the exercise of the put option, it is the Board's
intention that the listings of the Company's shares be
cancelled.
The Transaction
The Transaction is structured as a put option for nominal cost
in the Company's favour, to allow it to dispose of the entire
issued ordinary share capital of Raven Russia (Holdings) Cyprus
Limited ("RRHCL") (being the existing owner of all of the Group's
Russian assets and related debt) to its Russian management team,
for nominal consideration.
RPG's ability to exercise the put option will be conditional,
inter alia, on the Company's cancellation of the London listing of
its ordinary shares and the subsequent completion of the disposal
will be conditional upon satisfaction of any required regulatory
and other approvals. There is no binding obligation on the Company
to exercise the option and its exercise is solely at the discretion
of the Company. In the event the option is exercised, the Company
would retain an economic interest in RRHCL via existing unsecured
loans of GBP41 million and Rub1.1 billion to RHHCL and non voting
preference shares of GBP678 million, attracting a coupon of 8%, 15%
and 10% per annum respectively and with a term of ten years until
maturity. The preference shares are not convertible and will be
issued to the Company as part of a restructuring of RRHCL's balance
sheet, converting the total of its existing share premium account
to preference shares by way of a a bonus issue . The denomination
of the instruments is as noted above. As explained later in this
announcement, due to the current circumstances in Russia, the
introduction of international sanctions and Russian counter
sanctions, exchange controls limiting the movement and conversion
of roubles to hard currency and the impact that is having and will
continue to have on the Russian economy, the Company is unable to
assess the current value of these loans and preference shares or
the ability of RRHCL to service these loans or preference shares in
the future at this time.
Following the exercise of the put option RPG will hold the loan
and preference share assets above along with any cash balances. Its
principal commitment will be its own preference shares.
Suspension of listings
Prior to this restructuring, the unaudited balance sheet of
RRHCL at 31 December 2021 had net assets equivalent to GBP437
million, including the loans and share premium account noted above
and unaudited net operating income for the year to 31 December 2021
equivalent to GBP108 million. The Russian business has collected
97% of all rents due in the year to date and remains 97% let at
today's date. It is also expected that all debt service obligations
will be met at the quarter end should sanctions allow for payment.
However, as intimated in the announcement of 2 March 2022,
sanctions and counter sanctions are severely limiting the Company's
ability to access funds from its Russian subsidiaries and exchange
controls are limiting the ability to convert roubles into
alternative currencies, even at the current punitive exchange
rates. The uncertainty around the impact of those international
sanctions and any Russian counter sanctions on the Russian economy
make any estimate of the current net asset value of the Company and
RRHCL or any assessment of their future income profile unfeasible
at this time. This situation will persist both pre and post the
announcement of the Transaction and following the exercise of the
put option unless there is a significant lifting of sanctions.
As a result of the Company's inability to accurately assess its
current financial position and inform the market accordingly, the
Company requested and was granted a suspension of its ordinary
shares and preference shares to trading on the London Stock
Exchange effective at 7.30a.m. this morning. Similar suspensions
will apply to the Company's listings on TISE, JSE and MOEX.
De-listing of ordinary and preference shares
As noted above, RPG's ability to exercise the put option is
conditional, inter alia, on cancellation of the London listing of
the Company's ordinary shares. Consequently, the Board intends, as
soon as practicable, to prepare and send circulars to go to both
ordinary shareholders and preference shareholders and to convene
meetings to propose the required resolutions to cancel the London
listings of both share classes ("De-listings"). It will also look
to cancel the secondary listings the Company's shares have on TISE,
JSE and Moex. Shareholders should note that, if the de-listing of
the ordinary shares proceeds, shareholders will not be able to vote
on the exercise of the put option by the Company. The Circulars
will include further information on the Transaction and loan and
preference share instruments in RRHCL.
The Directors have confirmed their support for the Transaction
and the De-listings. The Company has discussed the De-listings in
detail with its major shareholders and expects their support at the
relevant meetings .
Given the fundamental change in the Company's business and
current political uncertainties, the Board has delayed the issue of
the audited financial statements for the year ended 31 December
2021 until further notice.
In light of the above, it remains unlikely that the Company will
pay the preference share coupon for the quarter ending 31 March
2022 and this will accumulate in accordance with the terms of the
instrument. A further announcement will be made prior to the
scheduled payment date.
Richard Jewson, Chairman said:
"In these extraordinary times it has become necessary to take
extraordinary measures in order to protect all employees and
stakeholders in our business. The combination of volatile markets
and the continual risk of sanctions and counter sanctions
necessitates this Transaction. We hope and pray for peace."
The information contained within this announcement is considered
by Raven Property Group Limited to constitute inside information
pursuant to Article 7 of EU Regulation No. 596/2014 as it forms
part of domestic law by virtue of the European Union (Withdrawal)
Act 2018. Upon the publication of this announcement via a
Regulatory Information Service, this inside information will be
considered to be in the public domain.
The person responsible for arranging for the release of this
announcement on behalf of the Company is Benn Garnham, Company
Secretary.
Enquiries
Raven Property Group Limited Tel: + 44 (0) 1481 712955
Anton Bilton
Glyn Hirsch
Novella Communications (public relations Tel: +44 (0) 203 151 7008
adviser)
Tim Robertson
Fergus Young
Singer Capital Markets (UK broker) Tel: +44 (0) 207 496 3000
Investment Banking - James Maxwell
/ Alex Bond
Markets - Alan Geeves / James Waterlow
Java Capital (South African Sponsor) Tel: +27 (11) 722 3050
Jean Tyndale-Biscoe / Andrew Brooking
Renaissance Capital (Russian broker) Tel: + 7 495 258 7770
David Pipia
Ravenscroft Consultancy & Listing Tel: + 44 (0) 1481 732746
Services Limited (TISE sponsor)
Semelia Hamon
About Raven Property Group
Raven Property Group Limited was founded in 2005 to invest in
class A warehouse complexes in Russia and lease to Russian and
International tenants. Its Ordinary Shares and Preference Shares
are listed on the Main Market of the London Stock Exchange and
admitted to the Official List of the UK Listing Authority and the
Official List of The International Stock Exchange ("TISE"). Its
Ordinary Shares also have a secondary listing on the main board of
the Johannesburg Stock Exchange and the Moscow Stock Exchange. The
Group operates out of offices in Guernsey, Moscow and Cyprus and
has an investment portfolio of circa 1.9 million square metres of
Grade "A" warehouses in Moscow, St Petersburg, Rostov-on-Don,
Novosibirsk and Nizhny Novgorod and 49,000 square metres of
commercial office space in St Petersburg. For further information
visit the Company's website: www.theravenpropertygroup.com
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END
MSCDZGMFNNDGZZG
(END) Dow Jones Newswires
March 17, 2022 03:47 ET (07:47 GMT)
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