IMPT.L Regulatory News (IMPT)

1 Dec 2009 07:00



Close High Income Properties plc

Conversion of the Company's 'D' Ordinary Shares into Ordinary Shares

Further to the announcement by Close High Income Properties plc (the 'Company') on 3 November 2009 (the 'Announcement'), the Directors of the Company, having considered all of the relevant information and having sought independent legal advice, resolved at the Board of Directors meeting on 25 November 2009 to effect the conversion (the 'Conversion') of 'D' Ordinary Shares into Ordinary Shares.

As detailed in the Announcement, Article 4.6 of the Articles of Association of the Company (the 'Articles') provides that the Conversion shall occur on 31 March 2009, however due to an administrative oversight, the Conversion did not take place. At that time, the Company was in breach of its loan facilities with its lending banks. This was noted in the annual audited report and the financial statements for the year ended 31 December 2008. However, on 19 October 2009, the Company announced that it had successfully refinanced the funding of its loan facilities with Nationwide in respect of its subsidiaries CHIP (Two) Limited and CHIP (Six) Limited.

The Company's other subsidiaries - CHIP (One) Limited, CHIP (Three) Limited, CHIP (Four) Limited and CHIP (Five) Limited - remain in breach of their loan facilities with HBOS although they have been provided with indicative terms dated 13 October 2009 that are subject to formal Lloyds Banking Group Plc Credit Committee approval. HBOS has advised that Credit Committee approval is expected to be received in early December 2009.

The Company's overall gearing ratio (secured debt to total assets) at 30 November 2009 is 72.4% for the Ordinary Shares and 92.7% for the 'D' Ordinary Shares. It is expected that following the Conversion the Company's overall gearing ratio for the new Ordinary Shares would be 76.2%.

The lending banks have confirmed that the Conversion will not prejudice the Company's position in relation to the debt facility arrangements with them.

The Directors have now resolved to effect the Conversion at the current time in accordance with independent legal advice received and in the manner prescribed by the Articles.

Conversion of 'D' Ordinary Shares

On the Conversion Date (which is expected to be 30 December 2009), 'D' Ordinary Shareholders  should receive (subject to confirmation from the Auditors of the Company of the conversion ratio calculated, in accordance with the Articles, as at close of business on 30 December 2008) four Ordinary Shares for every eleven 'D' Ordinary Shares held by them at close of business on  29 December 2009 (the 'Conversion Record Date'). In addition,  'D' Ordinary Shareholders will also receive a number of Deferred Shares for each 'D' Ordinary Share held on the Conversion Record Date which will be issued purely to help facilitate the Conversion. The Deferred Shares will have minimal rights attaching to them and will, in practice, have little or no value.

Distributions in respect of both the Ordinary Shares and 'D' Ordinary Shares are currently  suspended; however, in the event that distributions are re-instated after the Conversion, Shareholders of the new Ordinary Shares will be entitled to the same dividend per share as holders of existing Ordinary Shares.

It is expected that definitive share certificates for new Ordinary Shares arising from the Conversion of the 'D' Ordinary Shares will be dispatched by post by 18 January 2010. Pending issue of those  new Ordinary Share certificates, transfers of new Ordinary Shares will be certified against the register of the members of the Company. Once all of the 'D' Ordinary Shares have converted into new Ordinary Shares and such new Ordinary Shares have been admitted to trading on the London Stock Exchange's main market for listed securities and to the Official List of the UK Listing Authority, no 'D' Ordinary Shares will remain in issue and the Company will therefore apply for the removal of the 'D' Ordinary Share 'line' (ISIN GB00B0RTZ046) from trading and from the Official List.

The existing Ordinary Shares are already admitted to CREST and such shares can be held in certificated or uncertificated form. The Articles authorise the Company to appoint a person to execute a transfer of the Deferred Shares, for no consideration, to a person nominated by the Company to hold all of the Deferred Shares. In due course these Deferred Shares will be bought in by the Company for a nominal sum and subsequently cancelled.

Application will be made to the UK Listing Authority to cancel the listing of the 'D' Ordinary Shares and to apply for admission to trading and to the Official List of the new Ordinary Shares with effect from 5 January 2010. 

No application will be made for the Deferred Shares to be admitted to the Official List or any other recognised investment exchange.

Details of this announcement will be sent to all registered Shareholders for their information.

For further information please contact:

Peter Roscrow or Steven Oliver 

Close Investments Limited 

Tel: 020 7426 4000