EPIC.L Regulatory News (EPIC)

5 January 2024

For immediate release.

Ediston Property Investment Company plc

(the "Company")

(LEI: 213800JRL87EGX9TUI28)

Related Party Transaction

Further to the announcement of 20 December 2023, the board of the Company (the "Board") announces that the Company has successfully transferred its debt facilities to Ediston Capital Limited ("ECL") (the "Transfer").

In consideration of the Company agreeing to the Transfer, ECL and the Company have agreed that the net interest received by ECL (being, in summary, the difference between: (i) the interest earned on the principal amount of the debt facilities housed in a bank account up to the Discharge Date (as defined below); and (ii) the costs of servicing the debt facilities) (the "Net Interest") shall be applied as follows:

§ firstly, in settlement of all costs and expenses (including legal fees) incurred by ECL, the Company or owed by the Company to Aviva Commercial Finance Limited (the "Lender") in connection with the negotiation or execution of the Transfer (the "Transfer Costs");

§ secondly, until an amount of £200,000 of Net Interest has been applied in aggregate, all amounts of Net Interest will be split equally and paid to the Company and retained by ECL in equal amounts; and

§ thirdly, once an aggregate amount of £200,000 of Net Interest has been paid or retained pursuant to the paragraph above, one third of all further amounts of Net Interest will be paid to the Company with the remainder retained by ECL.

The Discharge Date is the earlier of: (i) the date on which all amounts owing by ECL to the Lender have been paid and discharged in full; (ii) assuming the Company enters into members' voluntary liquidation on 11 January 2024, the date on which the liquidators of the Company make their final distribution to the Company's shareholders; and (iii) 30 June 2024. It is anticipated that all amounts owning by ECL to the Lender will be paid and discharged in full on or around 29 March 2024.  

In the event that insufficient Net Income is generated such that the Transfer Costs are not settled in full, the Company's investment manager has confirmed that Ediston will pay the Company's Transfer Costs. The Company has also been unconditionally released from all obligations under its existing facilities agreement pursuant to the Transfer.

Under the Listing Rules of the FCA, ECL is a related party of the Company. When the Transfer is aggregated with all other amounts paid to Ediston pursuant to transactions or arrangements entered into in the previous 12 months, the Transfer is a related party transaction to which, by virtue of Listing Rule 11.1.11R, Listing Rule 11.1.10R applies.

William Hill, Chairman of the Company commented:

"The decision not to repay the Company's debt at the time its property assets were sold has enabled the Company to benefit from the difference between the current deposit interest rates and the costs of serving the debt. The Transfer is expected to enable further value to be extracted during the period in which the Company is in liquidation (assuming such liquidation is approved by shareholders). Any funds received will be distributed by the Company's liquidators as part of any final distribution that is made during the liquidation process. Such final distribution, if any, will be at a time to be determined solely by the liquidators but is envisaged to be in the region of six to nine months after the entry into of the liquidation. The Board considers that the interest sharing arrangements are appropriate given: the benefits noted above; it was not possible to realise value by transferring the debt to a third party (other than Ediston); Ediston has taken a cost risk in setting up the transaction; and it is Ediston's relationship with the Lender that has made the Transfer possible."

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