TIDMREO TIDMREOP
RNS Number : 4599Z
Real Estate Opportunities PLC
14 January 2011
REAL ESTATE OPPORTUNITIES PLC
INTERIM MANAGEMENT STATEMENT
Real Estate Opportunities plc ("REO" or "the Group"), the real
estate investment and development group active in the UK and
Ireland today issues its Interim Management Statement covering the
period from 30 October to the date of this announcement.
Highlights:
-- Battersea Power Station Planning Application approved by
Mayor of London and Wandsworth Council
-- Significant interest from prospective investors in Battersea
Power Station during the global investment roadshow
-- Terms of Balance Sheet Restructuring announced on 24 December
2010
-- Memorandum of Understanding signed with NAMA on Group
business plan
-- Continued strong operational performance with occupancy
levels at 95% and rent weighted average lease length of 12
years
Ray Horney, Chairman of REO, said: "We are pleased with the
progress we have made in recent months. The planning application
for BPS is progressing well, while we are also making good progress
towards balance sheet restructuring. We look forward to updating
the market on further progress in due course."
Battersea Power Station: As previously announced, Wandsworth
Council and the Mayor of London have both now approved the Group's
planning application for the Battersea Power Station site. The
application is currently being considered by the Secretary of State
for Communities and Local Government, with a decision anticipated
in the near future.
The approvals above represent a major step towards realising the
Group's vision for the scheme, which has garnered significant
support from various stakeholders including the Greater London
Authority, English Heritage, the Commission for Architecture and
the Built Environment (CABE) and most importantly, the local
community.
It has always been the Group's development strategy to partner
with a new investor, and we have already attracted significant
interest from a range of prospective investors.
Construction on Phase 1 of the development is scheduled to
commence in early 2012 with completion in 2016. The remaining
phases, including the first ever privately funded extension to the
tube network in Central London, are scheduled for completion
thereafter.
Balance Sheet Restructuring: As announced on 24 December 2010,
the Group's negotiations with its creditors regarding the terms of
a financial restructuring are progressing well. Subject to approval
from the various creditor groups, the detailed terms of the
restructuring deal are as follows:
-- Battersea Power Station would be transferred by REO to a new
holding company. The demerger of Battersea Power Station is
intended to facilitate the successful conclusion of the Group's
global third party investment road show through which it is seeking
to attract a long term equity partner into the demerged
vehicle.
-- The Group would effect debt for equity swaps with the holders
of the 7.5% convertible unsecured loan stock ("CULS") and zero
dividend preference shares ("ZDPs"). CULS holders would receive
21.2% of the equity in the new Battersea Power Station holding
company and 15.9% of the enlarged equity of REO. ZDP holders would
receive 12.1% of the equity in the new holding company and 9.1% of
the enlarged equity of REO. In addition, CULS and ZDP holders would
be issued with warrants representing 15.9% and 9.1% respectively of
the initial issued share capital of the new holding company. Each
warrant would entitle the holder to subscribe for one new ordinary
share at an exercise price of 0.001p at any time for up to 15 years
after the completion of the restructuring if the equity in the new
holding company has a value in excess of GBP510 million.
-- Ordinary shareholders (including Treasury Holdings) would
receive 5% of the equity in the new holding company and warrants in
respect of a further 5% and would, after the issue of ordinary
shares to CULS and ZDP holders, retain 75% of the enlarged equity
of REO.
-- As an incentive to manage the development of Battersea Power
Station, Treasury Holdings would be awarded a management fee
representing 7.7% of the equity in the new holding company.
-- The remaining equity in the new holding company, amounting to
approximately 54%, would be retained by REO and its subsidiaries
following the equitisation of various intercompany balances owed by
companies in the Battersea Power Station group.
-- REO would be released from various financial obligations
relating to the Battersea Power Station group, including guarantees
of senior facilities and the GBP150 million loan note issued to
Oriental Property Limited.
-- If the GBP150 million loan note and accrued interest is not
repaid on 31 May 2011, Oriental Property Limited would, subject to
certain exceptions, have the option to convert the debt into 75% of
the equity in the new Battersea Power Station holding company.
Shareholders in the new holding company would have the right to
acquire that interest prior to 1 June 2012 for an amount equal to
the sum due to Oriental Property Limited under the loan note
together with interest.
NAMA: As previously indicated, the Group submitted a
comprehensive business plan in May 2010 for NAMA's review. The
initial evaluation process is now complete resulting in a signed
Memorandum of Understanding, the terms of which are non-binding and
intended to form the basis for further negotiations. NAMA will
monitor the Group's subsequent performance to ensure that it
adheres to targets contained in the Memorandum of Understanding
and, subject to the further negotiations referred to above, binding
facility agreements will be entered into.
Property Portfolio: The portfolio was last valued in August
2010, by Treasury Holdings, in their capacity as investment
advisers, at a value of EUR1,050 million.
The Group continues to place a strong emphasis on proactive
management of the portfolio and tenant monitoring, resulting in
stable annualised income of EUR40.2million, during a period of
rental value deflation. Continuing strong operational performance
is underpinned by prime office and retail locations, together with
the diversity represented by high quality tenants including
Vodafone, Merrill Lynch, KPMG and Marks & Spencer, which
account for over 63% of the portfolio based on rental income.
Despite current market conditions, portfolio occupancy remains
at 95%, with only 4% of rent roll in arrears, and a rent weighted
average lease length of 12 years.
The Group's only current development project (Montevetro, Dublin
4) is due for practical completion at the end of January 2011, with
strong interest from the market in the building, while a prudent
approach to the timing of its remaining development pipeline
continues to be adopted.
Outlook:
The Board is encouraged by the significant progress made in
recent months in respect of the planning permission granted for the
Battersea Power Station project and the signing of the Memorandum
of Understanding with NAMA on the Group's business plan, while
negotiations towards a successful restructuring of the Group's
balance sheet have reached an advanced stage.
While the Group's performance continues to be adversely impacted
by continuing concerns about the underlying Irish economic
performance, the recent agreement between the Irish Government and
the IMF/EU should assist in stabilising the banking sector, thus
enhancing capital adequacy and liquidity of the banks. There are
also continuing signs that the commercial property market is
stabilising1.
Based on the above, in conjunction with the Group's quality
portfolio and strength of senior management, the Board remains
confident that the Group is positioned to benefit from predicted
stability and growth in the wider Irish and UK economies.
1 CBRE, Bi-Monthly Research report, November 2010
Contacts:
Real Estate Opportunities plc
Ray Horney, Chairman
Tel: + 44 (0)1273 775 225
Matrix Corporate Capital
Paul Fincham
Tel +44 (0)20 3206 7000
Goodbody Stockbrokers Linda Hickey, Corporate Broking Tel +353 1
641 6017
Finsbury
Gordon Simpson/Ed Simpkins
Tel: +44 (0)207 251 3801
Murray Consultants
Ed Micheau
Tel: + 353 1 498 0300
This information is provided by RNS
The company news service from the London Stock Exchange
END
IMSZMGMMRFKGMZM
Reo Sec. Zdp (LSE:REOP)
Graphique Historique de l'Action
De Jan 2025 à Fév 2025
Reo Sec. Zdp (LSE:REOP)
Graphique Historique de l'Action
De Fév 2024 à Fév 2025
