Alpha Group International Regulatory News (ALPH)

15 Jan 2007 11:52

Alpha Pyrenees Trust Limited15 January 2007 ALPHA PYRENEES TRUST LIMITED PROPOSED RE-CLASSIFICATION OF THE COMPANY PROPOSED AMENDMENT TO THE COMPANY'S INVESTMENT POLICY NOTICE OF EXTRAORDINARY GENERAL MEETING 15 January 2007 Summary • Alpha Pyrenees Trust announces its intention, subject to Shareholder approval, to re-classify the Company's listing from that of a property investment company under Chapter 15 of the Listing Rules to that of an overseas company with a secondary listing under Chapter 14 of the Listing Rules and to make certain related changes to the Company's investment policy. • The investment policy of the Company will continue to be to invest in a diversified portfolio of properties in France and Spain, focusing on commercial property, principally in the industrial, logistics, office and retail sectors. • The UKLA has recently published a number of consultation papers which have, inter alia, considered the listing regime for property investment companies which is currently contained within Chapter 15 of the Listing Rules - "Investment Entities". Given the introduction of legislation relating to REITs in the UK, which became effective on 1 January 2007, and the response received to one of the UKLA's consultation papers, the UKLA is proposing to introduce some major changes to Chapter 15 of the Listing Rules. • As a result of these amendments it is proposed to amend the Company's investment policy to align it more closely with REIT legislation. • Along with these changes, the UKLA has also recently, in a consultation paper, clarified the rules relating to overseas companies. Overseas companies (which include companies incorporated in the Channel Islands) are now able to list on the Official List with only a secondary listing, under Chapter 14 of the Listing Rules, without having to have a primary listing in another jurisdiction. • Given the proposed changes will not be implemented until the third quarter of 2007, the Board believes it to be in the Company's best interest to pro-actively seek the Re-classification now, rather than to wait for the proposed changes to be implemented. • The Re-classification will allow the Company to purchase the remaining 23 per cent. economic interest in the €124.5 million French business park acquisition which was announced on 27 December 2006. • The Re-classification is conditional on Shareholder approval. A circular will be posted to shareholders today, containing full details of the Re-classification and related matters and convening an Extraordinary General Meeting on 5 February 2007 to seek the approval of Shareholders. Richard Kingston, Chairman of Alpha Pyrenees Trust commented: "We are delightedto announce the Company's intention to re-classify its listing under the ListingRules. This pro-active move by the Company will align more closely theCompany's investment policy with the REIT legislation and provide addedflexibility to the Company in achieving its investment objectives, includingbeing fully invested by the end of 2007. The Re-classification will allow theCompany to purchase the remaining 23 per cent. economic interest in the €124.5million French business park acquisition which was announced on 27 December2006. On completion of this acquisition the Company will have invested orcommitted to invest over €250 million in over 185,000 square metres(approximately 2 million square feet) of commercial real estate in France andSpain at an average yield of 7.2%." This summary should be read in conjunction with the full text of thisannouncement. Copies of the Circular have been submitted to the UK Listing Authority and willshortly be available for inspection at the UK Listing Authority's DocumentViewing Facility, which is situated at: Financial Services Authority25 The North ColonnadeCanary WharfLondonE14 5HS Tel no: +44 (0) 20 7066 1000 ENQUIRIES Alpha Real CapitalPhillip Rose, Chief Executive 020 7591 1609 KinmontJohn O'Malley 020 7493 8488 CenkosNick Wells 020 7397 8920 ALPHA PYRENEES TRUST LIMITED PROPOSED RE-CLASSIFICATION OF THE COMPANY PROPOSED AMENDMENT TO THE COMPANY'S INVESTMENT POLICY NOTICE OF EXTRAORDINARY GENERAL MEETING 15 January 2007 Introduction Alpha Pyrenees Trust announces its intention, subject to Shareholder approval,to re-classify the Company's listing from that of a property investment companyunder Chapter 15 of the Listing Rules to that of an overseas company with asecondary listing under Chapter 14 of the Listing Rules and to amend theCompany's investment policy. The Board believes that the added flexibility and speed to completion ofproperty investments by the Company that the Re-classification will provide willassist the Company in achieving its stated investment objectives, which includebeing fully invested by the end of 2007. Given the introduction of legislation relating to REITs in the UK, which becameeffective on 1 January 2007, and the responses received to one of the UKLA'sconsultation papers, the UKLA is proposing to introduce some major changes toChapter 15 of the Listing Rules. As a result of these amendments, it is proposed to amend the Company'sinvestment policy to align it more closely with REIT legislation. The Re-classification amounts to a material change to the Company's investmentpolicy and therefore requires, and is conditional upon Shareholder approval, inaccordance with the Listing Rules. Shareholders will today be sent a circular setting out details of the proposedRe-classification and a notice convening an Extraordinary General Meeting forMonday, 5 February 2007. Background to and reasons for the Proposal The UKLA has recently published a number of consultation papers which have,inter alia, considered the listing regime for property investment companieswhich is currently contained within Chapter 15 of the Listing Rules - "Investment Entities". Given the introduction of legislation relating to REITsin the UK, which became effective on 1 January 2007, and the responses receivedto one of the UKLA's consultation papers, the UKLA is proposing to introducesome major changes to Chapter 15 of the Listing Rules. The proposed changes, if implemented, will result in Chapter 15 of the ListingRules moving from a rules-based regime to a principles-based regime. The UKLAbelieves that this will provide a more modern and flexible platform that willgive investment entities greater choice in selecting their investment objectivesand strategies. It is currently expected that the Listing Rules will be amendedin the third quarter of 2007. Along with these changes, the UKLA has also recently, in a consultation paper,clarified the rules relating to overseas companies. Overseas companies (whichinclude companies incorporated in the Channel Islands) are now able to list onthe Official List with only a secondary listing, under Chapter 14 of the ListingRules, without having to have a primary listing in another jurisdiction. Given the fact that the proposed changes to the Listing Rules will not beimplemented until the third quarter of 2007, the Board believes it to be in theCompany's best interest to pro-actively seek the Re-classification now, ratherthan to wait for the proposed changes to be implemented. The Re-classificationwill provide the Company with maximum flexibility to operate within its amendedinvestment policy, which is described in detail in the Circular and which isproposed to be amended to align it more closely with the REIT legislation. TheRe-classification will also enable the Company to complete certain transactionswithout the requirement to seek Shareholder approval whilst retaining on amodified basis some of the investment restrictions from Chapter 15 of theListing Rules. Effects of the Re-classification on the Company's obligations under the ListingRules The effect of the Re-classification is that the provisions of Chapters 7 to 13(inclusive) and Chapter 15 of the Listing Rules will cease to apply to theCompany. A summary of these provisions is set out in the Circular. Shareholders should note that, amongst other things, the 15 per cent. limit onthe proportion that any single property can constitute of the total assets ofthe Company and the 20 per cent. limit on the proportion that income from anysingle tenant (or tenants within the same group) can contribute to the totalincome of the Company in any financial year, which are both required inaccordance with Chapter 15 of the Listing Rules, will cease to apply to theCompany following the Re-classification. Instead, the Company will be required to comply with the more limitedrequirements of Chapter 14 of the Listing Rules, which are also summarised inthe Circular. Investment policy and applicable investment restrictions in the future The investment policy of the Company will continue to be to invest in adiversified portfolio of properties in France and Spain focusing on commercialproperty, principally in the industrial, logistics, office and retail sectors. Following the Re-classification, the Company will no longer be required tocomply with the prescriptive requirements of Chapter 15 of the Listing Rules.Given this, the Board believes that certain investment principles should beincluded in the investment policy in the future. The adoption of new investmentprinciples represents a material change to the Company's investment policy.Given the introduction of legislation in relation to REITs, effective from 1January 2007, the Board believes it is appropriate to align more closely theCompany's investment principles with those of the REIT requirements. Theproposed new investment principles to be adopted on Re-classification are setout in further detail in the Circular. Additional Shareholder protections to be retained In addition to the Company's investment policy and the Shareholder protectionsincluded in the Articles, the Board has also considered Chapters 7 to 13(inclusive) of the Listing Rules and believes that certain protections to beincluded within these Chapters should still be complied with, where possible, ona voluntary basis. These are set out in detail in the Circular. Current opportunity The Company announced on 27 December 2006 that it had acquired a 77 per cent.economic interest in a 77,000 square metre business park in France, comprising20 office, warehouse and research and development buildings, and that it hassecured a call option, and granted a put option, to acquire the remaining 23 percent. of the economic interest in the business park at a pre-determined price.If Shareholder approval for the Re-classification is received, the Board intendsto proceed with acquiring the remaining 23 per cent. as soon as possiblethereafter. The acquisition of the remaining 23 per cent. will, once complete,mean that this business park will comprise approximately 19 per cent. of theCompany's expected gross assets, once fully invested. Notice of Re-classification The Company is required to give 20 business days notice of theRe-classification. This announcement should be treated as such notice andShareholders should therefore note that, if the Re-classification is approved byShareholders, it is expected that it will become effective on 13 February 2007. Conclusion Given the impending changes to Chapter 15 of the Listing Rules, the Boardbelieves it to be in the Company's best interests to proceed with theRe-classification as this will provide the Company with maximum flexibility tooperate within its investment policy and will allow the Company to completecertain transactions without the requirement to seek Shareholder approval whilstretaining, on a modified basis, some of the investment restrictions from Chapter15 of the Listing Rules. The Board believes that the added flexibility and speed to completion ofinvestments that the Re-classification will provide will assist the Company inachieving its investment objectives. The Board has consulted with theInvestment Manager who unequivocally supports the Re-classification and alsobelieves it to be in the best interests of the Company and the Shareholders. Recommendation The Board believes that the Proposal is in the best interests of Shareholders asa whole and unanimously recommends that Shareholders approve the Proposal byvoting in favour of the Resolution to be proposed at the Extraordinary GeneralMeeting, as each Director intends to do in respect of his or her beneficialholdings, which in aggregate amount to 265,000 ordinary shares, representingapproximately 0.21 per cent. of the issued share capital. ENQUIRIES Alpha Real CapitalPhillip Rose, Chief Executive 020 7591 1609 KinmontJohn O'Malley 020 7493 8488 CenkosNick Wells 020 7397 8920 BDO Stoy Hayward Corporate Finance, a division of BDO Stoy Hayward LLP,Chartered Accountants, and Kinmont Limited, both of whom are authorised by theFinancial Services Authority, are acting for the Company, as sponsor andfinancial adviser respectively, and for no one else in connection with theProposal and will not be responsible to anyone other than the Company forproviding the protections afforded to their respective clients nor for providingadvice in relation to the Proposal. NOTES TO EDITORS ABOUT ALPHA REAL CAPITAL Alpha Real Capital is a value-adding international property fund managementgroup with operations in both the French and Spanish real estate markets. AlphaReal Capital was established by Phillip Rose and Sir John Beckwith. Phillip Rose has 25 years' experience in the real estate, funds management andbanking industries in Europe, the USA and Australasia. He has been Head of RealEstate for ABN AMRO Bank, Chief Operating Officer of European shopping centreinvestor and developer TrizecHahn Europe (where he was responsible for a €1billion European investment and development programme from 1999-2000), ManagingDirector of Lend Lease Global Investment where, during his tenure from 1994 to1999, he was responsible for managing European property investments andExecutive Manager of listed fund General Property Trust. He is currently anon-executive director of Great Portland Estates and a member of the ManagementCommittee of the Hermes Property Unit Trust. Sir John Beckwith has been involved in property investment and other investmentfor his entire working life. He founded London & Edinburgh Trust PLC ("LET") in1971 where he was Chairman and Chief Executive Officer and developed it into oneof the top ten listed real estate companies in the UK. Following the sale ofLET, he established Pacific Investments through which he founded a number ofsuccessful asset management businesses, including Liontrust Asset Management andThames River Capital. Alpha Real Capital is the Investment Manager to Alpha Pyrenees Trust. AlphaReal Capital's European Funds Director, Paul Cable, is Fund Manager to AlphaPyrenees Trust. Paul Cable has 27 years' experience in the real estate andbanking industries in the UK, Europe and the Far East and was previouslyresponsible for Sir John Beckwith's property investment activities in France andSpain for six years. Further information is available at www.alpharealcapital.com including contactdetails for Alpha Real Capital's UK, French and Spanish offices. ABOUT ALPHA PYRENEES TRUST Alpha Pyrenees Trust is a Guernsey registered closed-ended investment companyinvesting in French and Spanish commercial real estate. Investment Strategy The strategy of the Company is to invest in a diversified portfolio ofproperties in France and Spain, focusing on commercial property in theindustrial, logistics, office and retail sectors. Alpha Real Capital believesthat there will be capital growth opportunities in the portfolio through incomegrowth, active asset management and yield compression. Directors The Directors of the Company, all of whom are non-executive, are responsible forthe implementation of the investment policy of the Company and the overallsupervision of the Group's activities. The Board consists of: Richard Kingston (Chairman)Christopher BennettDavid JeffreysPhillip RoseSerena Tremlett Richard Kingston was an executive director of Slough Estates Plc, one of thelargest London Stock Exchange listed property companies. He was responsible forGroup Finance at Slough Estates Plc for nine years, and chairman of theircontinental European real estate activities. He was a non-executive director ofMersey Docks and Harbour Company and is a qualified Chartered Accountant. APPENDIX: DEFINITIONS References in this announcement to statutes or government agencies are, unlessspecifically stated otherwise, to statutes or government agencies in the UK. Thefollowing definitions apply throughout this announcement unless the contextrequires otherwise: "Alpha Pyrenees Trust" or the Alpha Pyrenees Trust Limited"Company" "Articles" the articles of association of the Company "Board" or "Directors" the directors of the Company for the time being "business day" any day where banks in London and Guernsey are open for business (excluding Saturdays and Sundays) "Circular" the circular to shareholders, dated 15 January 2007 setting out details of the Proposal "Extraordinary General Meeting" the extraordinary general meeting of the Company convened for 5 February 2007, notice of which is set out at the end of the Circular, or any reconvened meeting following adjournment thereof "Investment Manager" or "Alpha Real Alpha Real Capital LLP, investmentmanager to the Capital" Company "Listing Rules" the listing rules made pursuant to Part VI of FSMA to be amended on 20 January 2007 by the Transparency Obligations Directive (Disclosure and Transparency Rules) Instrument 2006 "Official List" the Official List of the UK Listing Authority "ordinary shares" ordinary shares of no par value in the capital of the Company "Proposal" or "Re-classification" the proposed re-classification of the Company's listing from that of a property investment company listed under Chapter 15 of the Listing Rules to that of an overseas company listed under Chapter 14 of the Listing Rules including the amendments to the Company's investment policy described under the heading "Investment policy and applicable investment restrictions in the future" in the letter from the Chairman of Alpha Pyrenees Trust set out in Part 1 of the Circular "REITs" UK Real Estate Investment Trusts being companies to which Part IV of the Finance Act 2006 applies "Resolution" the resolution to be proposed at the Extraordinary General Meeting "Shareholders" holders of ordinary shares "UKLA" or "UK Listing Authority" the FSA acting in its capacity as the competent authority for the purposes of Part VI of FSMA "UK" or "United Kingdom" United Kingdom of Great Britain and Northern Ireland This information is provided by RNS The company news service from the London Stock Exchange