» Rights Offer Declaration Announcement

Rights Offer Declaration Announcement

Posted on: 13 June 2013


Introduction

It is the intention of NEPI to undertake a rights offer to all NEPI shareholders in order to raise approximately €100 million (“the rights offer”).

The proceeds from the rights offer are expected to be used to fund potential acquisitions which NEPI is in the process of negotiating.

Salient terms of the rights offer

NEPI shareholders will be offered a total of 20 833 328 new NEPI shares (“new NEPI shares” or “rights offer shares”) at the subscription price of €4.80 per rights offer share and in the ratio of 13.07987 new NEPI shares for every 100 ordinary shares held by them on Friday, 5 July 2013 for shareholders on either the South African share register or the UK share register, or 13.07987 pre-emptive rights for every 100 NEPI shares held on Friday, 28 June 2013 for shareholders registered in Romania. For shareholders on the South African share register, the ZAR equivalent subscription price will be announced on or before 21 June 2013.

The letters of allocation, which are issued to shareholders on the South African share register, are negotiable and can be traded on the JSE under JSE code: NEPN and ISIN: IM00BBGB0D65.

Subject to receiving the necessary approvals from the BVB and Financial Supervision Authority in Romania, it is intended that the pre-emptive rights, which are issued to shareholders registered in Romania, are negotiable and can be traded on the BVB by shareholders registered in Romania under BVB code: NEPR03 and ISIN: IM00BBGB0G96.

Shareholders are advised that neither the letters of allocation issued to shareholders on the SA share register nor the pre-emptive rights issued to shareholders registered in Romania are fungible and accordingly are not capable of being transferred between the JSE and the BVB.

Excess shares

Shareholders on the South African share register, shareholders on the UK share register and shareholders registered in Romania will have the right to apply for any excess rights offer shares not taken up by other shareholders and any such excess shares will be attributed equitably taking cognisance of the number of shares and rights held by the shareholder prior to such allocation, including those taken up as a result of the rights offer, and the number of excess rights applied for by such shareholder.

Foreign shareholders on the South African share register

Foreign shareholders on the South African share register may be affected by the rights offer, having regard to prevailing laws in their relevant jurisdictions. Such foreign shareholders should inform themselves about and observe any applicable legal requirements of such jurisdiction in relation to all aspects of the rights offer that may affect them and should refer to the rights offer circular for details of the rights offer and the laws and regulations governing the rights offer. Any foreign shareholder who is in doubt as to his position with respect to the rights offer in any jurisdiction should consult an appropriate independent professional adviser in the relevant jurisdiction without delay.


Important dates and times for shareholders on the SA share register

The timetable for the rights offer will be as follows:

Finalisation announcement released on SENS onFriday, 21 June 2013
Last day to trade in NEPI shares in order to participate in the rights offer onFriday, 28 June 2013
Listing and trading of letters of allocation on the JSE onMonday, 1 July 2013
NEPI shares commence trading on the JSE ex-rights offer entitlement onMonday, 1 July 2013
Record date for determination of shareholders entitled to participate in the rights offer (initial record date) onFriday, 5 July 2013
Rights offer opens at 09:00 onMonday, 8 July 2013
Rights offer circular, revised listing particulars and form of instruction posted to shareholders, where applicable, onMonday, 8 July 2013
Dematerialised shareholders will have their accounts at their CSDP or broker automatically credited with their entitlement onMonday, 8 July 2013
Certificated shareholders on the register will have their entitlement credited to a nominee account held with the South African transfer secretaries (Computershare Investor Services (Proprietary) Limited) onMonday, 8 July 2013
Last day to trade letters of allocation on the JSE onFriday, 19 July 2013
Maximum number of rights offer shares listed and trading therein commences on the JSE onTuesday, 23 July 2013
Rights offer closes at 12:00 on (see note 2)Friday, 26 July 2013
Record date for letters of allocation (final record date) onFriday, 26 July 2013
Results of the rights offer announced on SENS onMonday, 29 July 2013
Results of the rights offer announced in the press in South Africa onTuesday, 30 July 2013
New NEPI shares issued onTuesday, 30 July 2013
Dematerialised shareholders’ accounts updated and debited by their CSDP or broker with new NEPI shares onWednesday, 31 July 2013
Certificates posted to certificated shareholders (in respect of the rights offer shares) on or aboutWednesday, 31 July 2013
Refunds (if any) to certificated shareholders in respect of unsuccessful applications made on or aboutWednesday, 31 July 2013
New NEPI shares issued in respect of successful excess shares applications for dematerialised shareholders and certificated shareholders on or aboutWednesday, 31 July 2013
Dematerialised shareholders’ accounts updated and debited by their CSDP or broker (in respect of successful excess shares applications) and certificates posted to certificated shareholders (in respect of successful excess shares applications) on or aboutWednesday, 31 July 2013
Notes
  1. All times indicated in this timetable are South African times.
  2. Dematerialised shareholders are required to inform their CSDP or broker of their instructions in terms of the rights offer in the manner and time stipulated in the agreement governing the relationship between the shareholder and its CSDP or broker.
  3. Share certificates may not be dematerialised or rematerialised between Monday, 1 July 2013 and Friday, 5 July 2013, both days inclusive.
  4. Transfers between the SA share register, the UK share register and the Romanian Central Depository may not take place between Monday, 1 July 2013 and Friday, 5 July 2013, both days inclusive.
  5. Dematerialised shareholders will have their accounts at their CSDP or broker automatically credited with their rights and certificated shareholders will have their rights credited to a nominee account at Computershare Investor Services (Proprietary) Limited.
  6. CSDPs effect payment in respect of dematerialised shareholders on a delivery-versus-payment method.
  7. The rights offer shares will be issued on the SA, UK and Romanian share registers on the same date, being Tuesday, 30 July 2013.
  8. Shareholders on the SA register may not commence trading in the rights offer shares until Tuesday, 23 July 2013.

Important dates and times for shareholders on the UK share register

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

NEPI shares marked “ex-rights” by the London Stock Exchange at 8.00 a.m.Monday, 1 July 2013
Record date for entitlements under the rights offerFriday, 5 July 2013
Dispatch of provisional allotment letters and shareholders circular publishedMonday, 8 July 2013
Latest time and date for acceptance and payment in full at 10.00 a.m.Friday, 26 July 2013
Results of the rights offer announced on RNSMonday, 29 July 2013
Dealing in new NEPI shares, commence on AIM at 8.00 a.m.Tuesday, 30 July 2013
Allocation of excess shares in respect of successful excess shares applications onWednesday, 31 July 2013
Expected dispatch of definitive share certificates for the new NEPI shares in certificated form for shareholders on the UK register on or aboutWednesday, 31 July 2013
Refunds (if any) to shareholders in respect of unsuccessful excess shares applications made on or aboutWednesday, 31 July 2013
New NEPI shares issued in respect of successful excess shares applications for dematerialised shareholders and certificated shares on or aboutWednesday, 31 July 2013
Notes
  1. References to times in this timetable are to London time unless otherwise stated.
  2. Share certificates may not be dematerialised or rematerialised between Monday, 1 July 2013 and Friday, 5 July 2013, both days inclusive.
  3. Transfers between the SA share register, the UK share register and the Romanian Central Depository may not take place between Monday, 1 July 2013 and Friday, 5 July 2013, both days inclusive.
  4. The rights offer shares will be issued on the SA, UK and Romanian share registers on the same date being Tuesday, 30 July 2013.

Important dates and times for shareholders/pre-emptive rights holders registered in Romania

Subject to receiving approval from the BVB and the Financial Supervision Authority in Romania, the timetable for the rights offer is as follows:

Finalisation announcement released on the BVB onFriday, 21 June 2013
Last date to be registered as NEPI shareholder in order to be entitled to receive pre-emptive rightsFriday, 28 June 2013
Commence trading pre-emptive rights on the BVBTuesday, 9 July 2013
Pre-emptive rights available for transfer into individual accounts of NEPI shareholders registered in RomaniaTuesday, 9 July 2013
Last day to trade rights on the BVBFriday, 12 July 2013
Record date for determination of pre-emptive rights holder (being either shareholders who have received pre-emptive rights and not disposed of them or others who may have acquired pre-emptive rights) who will be entitled to exercise those rights by subscribing for rights offer sharesWednesday, 17 July 2013
Subscription period on the BVB opens at 12:00 p.m.Wednesday, 17 July 2013
Subscription period on the BVB closes at 12:00 p.m.Friday, 19 July 2013
Announce results of the rights offer (BVB)Monday, 29 July 2013
Credit shares to the global accounts of the brokers/custodians where the pre-emptive rights holders have their individual accounts for pre-emptive rights holders who have exercised their rightsTuesday, 30 July 2013
Allocation of excess shares in respect of successful excess shares applications onTuesday, 30 July 2013
Refunds (if any) to shareholders in respect of unsuccessful excess shares applications made on or aboutWednesday, 31 July 2013
New NEPI shares credited to the global accounts of the brokers/custodians where the pre-emptive rights holders have their individual accounts for pre-emptive rights holders who have subscribed excess shares, in respect of successful excess shares applications of shareholders on or aboutWednesday, 31 July 2013
Notes
  1. References to times in this timetable are to Romanian time unless otherwise stated.
  2. Transfers between the SA share register, the UK share register and the Romanian Central Depository may not take place between Monday, 1 July 2013 and Friday, 5 July 2013, both days inclusive.
  3. The rights offer shares will be issued on the SA, UK and Romanian share registers on the same date being Tuesday, 30 July 2013.

Dealings in nil paid rights and fully paid rights on AIM

No application has been or will be made for the admission of new NEPI shares (nil paid) to trading on AIM and accordingly there will be no dealings on AIM in any nil paid rights to new NEPI shares.

Fully paid provisional allotment letters will not be sent to qualifying shareholders who take up their entitlements to new NEPI shares. Accordingly, there will be no dealings on AIM in fully paid rights represented by provisional allotment letters and the same will not be negotiable (fully paid) on AIM.

After Tuesday, 30 July 2013, the new NEPI shares will be in registered form and transferable in the usual way.


Financial effects of the rights offer

The table below sets out the pro forma financial effects of:

  • the acquisition by the NEPI group of the shares in and shareholder’s claim against BVB Real Estate S.R.L. (“BVB Real Estate”), which owns an A–grade office building situated in Bucharest, Romania, known as The Lakeview, as well as BVB Real Estate’s outstanding bank debt from MKB Bank Zartkoruen Mukodo Reszvenytarsasag (“The Lakeview acquisition”);
  • the issue of 3 625 314 new NEPI shares at an issue price of €4.90 per share in respect of the election by shareholders to receive a return of capital by way of an issue of 2.774 new NEPI shares for every 100 NEPI shares held on the relevant record date, being Thursday, 28 March 2013 or a cash dividend of 12.05 Euro cents per share (“the return of capital”);
  • the issue and listing of 11 290 323 new NEPI shares at R62.00 per share on 24 April 2013, in terms of an accelerated book build process, raising in aggregate gross proceeds of R700 million (€59 million equivalent using a EUR:ZAR exchange rate of €1.00:R11.8656) (“the accelerated book build”); and
  • the rights offer,

based on NEPI’s audited consolidated statement of financial position as at 31 December 2012. These financial effects are the responsibility of the directors of NEPI and they have been prepared for illustrative purposes only, in order to provide information on the financial position of NEPI assuming that The Lakeview acquisition, the return of capital, the accelerated book build and the rights offer had been implemented on 31 December 2012.

The pro forma consolidated statement of financial position of the NEPI group as at 31 December 2012 and the explanatory notes thereto will be provided in the circular setting out full details of the rights offer which circular is to be dispatched to NEPI shareholders on 8 July 2013 (“rights offer circular”).

No pro forma statement of comprehensive income is presented as the utilisation of the cash raised through the rights offer is under the control of management and will be used to fund pipeline acquisitions at acquisition yields expected to be either neutral or enhancing to future earnings. The average acquisition yield is expected to be approximately 8%. NEPI intends deploying the full amount of €100 million by the end of October 2013.

Due to its nature, the pro forma financial information (collectively, the pro forma financial effects and the pro forma consolidated statement of financial position) may not give a fair reflection of NEPI’s financial position, changes in equity, results of operations and cash flows subsequent to The Lakeview acquisition, the return of capital, the accelerated book build and the rights offer. The pro forma financial information has been reported on by the independent reporting accountants and their assurance report will be included in the rights offer circular.

The pro forma financial information has been prepared in accordance with the accounting policies of the NEPI group that were used in the preparation of the audited results for the year ended 31 December 2012.

The table below reflects the pro forma financial effects of The Lakeview acquisition, the return of capital, the accelerated book build and the rights offer on a NEPI shareholder:

BeforePro forma before the rights offerPro forma after the rights offerChange after the rights offer
EUREUREUR%
Net asset value per share (EUR)2.832.933.1511.44
Net tangible asset value per share (EUR)2.732.823.0612.01
Adjusted net asset value per share (EUR)2.882.983.1910.90
Number of shares in issue for net asset value and net tangible asset value per share purposes139 258 914154 174 551175 007 87925.67
Number of shares in issue for adjusted net asset value per share purposes144 362 152159 277 789180 111 117)24.76
Notes and assumptions
  1. The figures set out in the “Before” column above have been extracted from the audited consolidated statement of financial position as at 31 December 2012.
  2. The Lakeview acquisition, the return of capital, the accelerated book build and rights offer are assumed to have been implemented on 31 December 2012 for net asset value, adjusted net asset value and net tangible asset value per share purposes.
  3. The “Pro forma before the rights offer” column includes adjustments in respect of The Lakeview acquisition, the return of capital and the accelerated book build, as further detailed in notes 5, 6 and 7 below.
  4. The “Pro forma after the rights offer” column is the “Pro forma before the rights offer” column incorporating adjustments in respect of the rights offer, as further detailed in note 8 below
  5. In respect of The Lakeview acquisition the amounts set out in the “Pro forma before the rights offer” column were calculated by consolidating the financial position of NEPI as at 31 December 2012 and the management accounts of BVB Real Estate as at 31 December 2012, subject to the assumptions and adjustments set out below: a. All the shares in and shareholder’s claim against BVB Real Estate and outstanding bank debt of BVB Real Estate from MKB Bank Zartkoruen Mukodo Reszvenytarsasag were acquired at the aggregate purchase price of approximately €61.7 million which was settled in cash. b. Estimated transaction costs of €0.2 million were expensed in accordance with IFRS 3 Revised, (Business Combinations). c. The net asset value of BVB Real Estate as at 31 December 2012 was €8.2 million. d. The acquisition of BVB Real Estate has been accounted for under IFRS 3 Revised, (Business Combinations) whereby trade and other receivables, trade and other payables, deferred taxation and goodwill have been recognised. e. An amount of €4.1 million was recognised in goodwill and as a deferred taxation liability. f. The management accounts of BVB Real Estate as at 31 December 2012 have been reviewed by the independent reporting accountants.
  6. In respect of the return of capital the following assumptions and adjustments have been made: a. 3 625 314 new NEPI shares with a par value of €0.01 per share were issued on market as listed shares. b. An amount of €36 253 was transferred from share capital to share premium.
  7. In respect of the accelerated book build the following assumptions and adjustments have been made: a. 11 290 323 new shares were issued pursuant to the accelerated book build, thereby raising capital of €59 million (R700 million). b. Although the proceeds of the accelerated book build are intended to be used to finance yield enhancing investment opportunities in direct property, there are no firm commitments at the date of this circular to deploy the proceeds which were received from the accelerated book build. Accordingly, there is no factually supportable financial information regarding potential investments. Consequently, it has been assumed that the net proceeds of the accelerated book build (after payment of estimated costs of approximately €0.3 million) are held in cash and cash equivalents. c. Estimated costs relating to the accelerated book build of approximately €0.3 million have been written off against share premium. d. A EUR:ZAR exchange rate of €1.00:R11.8656 is assumed to apply.
  8. In respect of the rights offer the following assumptions and adjustments have been made: a. 20 833 328 rights offer shares are assumed to be issued pursuant to the rights offer, thereby raising capital of €100 million. b. Estimated costs related to the rights offer of approximately €0.2 million, which will be funded out of the proceeds of the rights offer, have been written off against share premium. c. A EUR:ZAR exchange rate of €1.00:R12.92 is assumed to apply.

Circular

Further details of the rights offer will be set out in the rights offer circular which is expected to be dispatched to NEPI shareholders on Monday, 8 July 2013 and will be made available on the company’s website www.nepinvest.com as from Monday, 8 July 2013 and on the BVB’s website (www.bvb.ro) from Monday, 8 July 2013.

The rights offer circular will incorporate revised listing particulars, as required in terms of the JSE Listings Requirements.

The rights offer circular together with the revised listing particulars will be considered to form a Prospectus in terms of Romanian legislation. Printed versions of the rights offer circular and the revised listing particulars will be available on request at the offices of Intercapital Invest SA at 33 Aviatorilor Boulevard, 1st floor, Sector 1, Bucharest, Romania.