Last checked at 30 May 2008 13:01
RIS ANNOUNCEMENT
F&C COMMERCIAL PROPERTY TRUST LIMITED (THE "COMPANY")
30 May 2008
INVESTMENT IN THE MALL UNIT TRUST
Shareholders may be aware of recent announcements in relation to the Mall Unit Trust, in which the Company has an investment with a value of £34.6m as at 31 March 2008 (3.2% of the Company's gross assets). Capital & Regional plc, which is a significant investor in, and property manager of, the Mall Unit Trust, has recently announced that the Mall Unit Trust is close to breaching its loan to value covenants of 60% under its debt facilities. The Mall Unit Trust has now sent out a circular to unitholders proposing an open offer to raise £286m of new equity at 101p per unit to resolve the covenant issue.
The Mall Unit Trust has confirmed that the open offer is fully underwritten by Norwich Union Life and Pensions and CGNU Life Assurance, both clients of Morley Fund Management Limited, which is the fund manager of the Mall Unit Trust. The Company, and its advisers, will carefully consider the formal proposals received from the Mall Unit Trust before making any decision on whether it is in the best interests of shareholders for the Company to vote in favour of the proposals and/or to participate in the equity capital raising.
With effect from the Company's announcement of its net asset value per share as at 31 December 2007, the Board has marked down the value of the units held by the Company in the Mall Unit Trust by 10%. At that time the Board stated that this discount reflected the Board's view of the likely realisable value of these assets should the Company wish to dispose of its holdings in an orderly fashion over time, based on current market conditions. The Board also stated that the quantum of such discount, if any, would be reviewed regularly and would be amended, as required, to reflect changes in market conditions and practice.
In the light of the Mall Unit Trust's proposals, and on the basis set out above, the Board has resolved that it will be appropriate to consider making a further provision against the value of the units in the Mall Unit Trust in the net asset value per share as at 30 June 2008. The Directors will carefully consider the terms and progress of the open offer and the updated property information to be provided by Morley in respect the Mall Unit Trust before determining what further provision should be made against the value of the units. For illustrative purposes only, had a valuation per unit of 101p, being the issue price under the open offer, been applied to the units as at 31 March 2008, the Company's holding in the Mall Unit Trust would have been valued at £20.9m and the unaudited net asset value per share as at 31 March 2008 would have been 118.6p, being 2.0p lower than that published on 24 April 2008.
The Company expects to publish its next net asset value in July 2008.
All enquiries:
Richard Kirby, F&C Investment Business Limited 020 7628 8000
Nigel Russell/Graeme Caton, G&N Collective Funds Services Limited
0131 226 4411