17 Oct 2012 10:23
17 October 2012
Pacific Alliance China Land Limited
Tender Offer
Pacific Alliance China Land Limited ("PACL" or the "Company"), the closed-end investment company admitted to trading on AIM and focused on investing in a portfolio of investments in existing properties, new developments, distressed projects and real estate companies in Greater China, today announces that a circular (the "Circular") will be sent to shareholders later today detailing a tender offer (the "Tender Offer") closing at 12.00 midnight (UK time) on 16 November 2012 to purchase up to 2.73 per cent. of the Ordinary Shares of the Company at a price equal to the unaudited Net Asset Value as at 30 September 2012.
Background
On its admission to AIM in November 2007, the Company's Admission Document indicated that PACL would provide a regular level of income in the form of a dividend up to an annual yield of 6 per cent of Net Asset Value. At an extraordinary general meeting held on 2 March 2009 (the "2009 EGM"), a special resolution was passed authorising the Company to increase this annual yield to 12 per cent. of Net Asset Value.
On 7 February 2011, the Company announced that to facilitate the Company's investment strategy going forward, and following advice from its Investment Manager, the Board of Directors had modified the Company's distribution policy to match distributions to shareholders with ordinary course realisations in order to maximise returns, instead of liquidating an investment primarily to fund a distribution. The modified policy requires that each distribution represent 50 per cent. of the Company's net realised profit of a fully realised investment. The returned principal plus the balance of the net realised profit is made available for reinvestment by the Company.
On 10 August 2011, the Company announced the completed sale of its 30 per cent. interest in SZITIC Commercial Property Development Co., Ltd. ("Project Malls") with received net cash proceeds of RMB377 million (equivalent to USD 58.6 million after tax) of which the equivalent of USD 56.8 million was submitted for repatriation (the "Proceeds").
The Company has now successfully repatriated the full amount of the Proceeds.
In July 2012, the Company made an initial distribution of USD 11.4 million to investors through a tender offer, and the Company now intends to distribute the remaining USD 8 million of distributable net realised profit through this tender offer.
The Tender Offer
The Company will use its wholly-owned subsidiary, PACL Trading Limited (the "Share Purchase Subsidiary"), to implement a tender offer (the "Tender Offer"), whereby each Shareholder can tender up to 2.73 per cent. of their Ordinary Shares (their "Basic Entitlement") at a price equal to USD 2.16 per Ordinary Share, the unaudited Net Asset Value per Ordinary Share on 30 September 2012 rounded down to the nearest whole US cent (the "Tender Price").
In addition, Shareholders who tender their full Basic Entitlement may also tender Excess Shares at the Tender Price under the Excess Application Facility. The Tender Offer will be open and available to all Shareholders on the Company's Register of Members (or, where Ordinary Shares are held in Euroclear and/or Clearstream, otherwise beneficially entitled to such Ordinary Shares) on the Record Date of Friday, 9 November 2012.
Depending on individual financial and tax circumstances and investment objectives, Shareholders that wish to remain investors in the Company may be able to book a gain by participating in the Tender Offer and using the proceeds received upon Settlement to repurchase Ordinary Shares in the market at a discount to the Tender Price.
The Timetable for the Tender Offer is as follows:
Tender Offer Record Date | Friday, 9 November 2012 |
Latest Time and Date for Receipt of Tender Forms | 12.00 midnight (UK time) on Friday, 16 November 2012 |
Tender Offer Results Announcement | Monday, 19 November 2012 |
Tender Offer Settlement Date | Monday, 26 November 2012 |
The Circular that will be sent to Shareholders today will contain the formal terms of the Tender Offer, together with details of how Shareholders can tender their Ordinary Shares for purchase, if they wish to do so. A copy will also be available on the Company's website www.pacl-fund.com.
The extent to which Shareholders participate in the Tender Offer is a matter for each Shareholder to decide, and will be influenced by their own individual financial and tax circumstances and their investment objectives.
For further information please contact:
MANAGER:
Patrick Boot, Managing Partner Pacific Alliance Real Estate Limited 15/F, AIA Central 1 Connaught Road Central, Hong Kong T: (852) 2918 0088 F: (852) 2918 0881 pboot@pagasia.com
| LEGAL COUNSEL:
Jon Lewis, Group General Counsel PAG 15/F, AIA Central 1 Connaught Road Central, Hong Kong T: (852) 2918 0088 F: (852) 2918 0881 jlewis@pagasia.com
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BROKER:
Hiroshi Funaki LCF Edmond de Rothschild Securities Tel: (44) 20 7845 5960 Fax: (44) 20 7845 5961 funds@lcfr.co.uk
| NOMINATED ADVISER:
Philip Secrett Grant Thornton Corporate Finance Tel: (44) 20 7383 5100 Philip.J.Secrett@uk.gt.com
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MEDIA RELATIONS:
Stephanie Barry PAG T: (852) 3719 3375 sbarry@pagasia.com
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Notes to Editors:
About Pacific Alliance China Land Limited
Pacific Alliance China Land Limited ("PACL") (AIM: PACL) is a closed-end investment company with net assets of USD 294.6 million as at 30 September 2012. PACL was admitted to trading on the AIM Market of the London Stock Exchange in November 2007. PACL is focused on investing in a portfolio of existing properties, new developments, distressed projects and real estate companies in Greater China.
For more information about PACL, please visit: www.pacl-fund.com
Pacific Alliance China Land Limited is a member of PAG (formerly known as Pacific Alliance Group), the Asian alternative investment fund management group. Founded in 2002, PAG is now one of the region's largest Asia-focused alternative investment managers, with funds under management across Private Equity, Real Estate and Absolute Return strategies.
PAG has a presence across Asia with over 320 staff working in the region.
For more information about PAG, please visit: www.pagasia.com
Key Features of the Tender Offer
The key features of the Tender Offer are as follows:
·; the Tender Offer is for up to 2.73 per cent. of the Company's issued share capital;
·; Shareholders can decide whether or not to tender Ordinary Shares up to their Basic Entitlement (being 2.73 per cent. of their respective holdings on the Record Date);
·; Shareholders who tender their full Basic Entitlement may also tender Excess Shares at the Tender Price under the Excess Application Facility (see paragraph 3 of Part 1 of the Circular for further details); and
·; the Tender Price is USD 2.16 per Ordinary Share, the unaudited Net Asset Value per Ordinary Share as at 30 September 2012 rounded down to the nearest whole US cent.
The Tender Offer is conditional, inter alia, on the Company not terminating the Tender Offer in accordance with paragraph 8 of Part 2 of the Circular.
Options for Shareholders
Shareholders can choose to:
·; not tender any of their Ordinary Shares; or
·; tender such number of their Ordinary Shares up to their Basic Entitlement for purchase and to receive a cash payment as consideration for such purchase; and
·; should they so wish, tender Excess Shares using the Excess Application Facility for purchase and to receive a cash payment as consideration for such additional purchase (if there is an oversubscription resulting from excess applications, allocations in respect of such excess applications will be scaled down pro rata).
Shareholders may tender up to their Basic Entitlement (being 2.73 per cent. of their respective holdings on the Record Date) under the Tender Offer. Shareholders who apply for their full Basic Entitlement may also tender Excess Shares at the Tender Price under the Excess Application Facility. There is no cash dividend alternative available to Shareholders in connection with this 2.73 per cent. distribution.
Further Details of the Tender Offer
Shareholders are invited to tender their Basic Entitlement to the Share Purchase Subsidiary and should they wish, Excess Shares using the Excess Application Facility.
The Share Purchase Subsidiary will purchase validly tendered Ordinary Shares at the Tender Price and will hold such Ordinary Shares to replicate a treasury facility. Further details of the Company's policies regarding its treasury facility are provided in paragraph 9 of Part 1 of the Circular.
Shareholders' attention is drawn to Part 2 of the Circular which, together with the Tender Form, constitutes the terms and conditions of the Tender Offer. Details of how Shareholders tender Ordinary Shares can be found at paragraph 4 of Part 2 of the Circular
Shareholders should note that, once tendered, such Ordinary Shares may not be sold, transferred, withdrawn from the Tender Offer, charged or otherwise disposed of other than in accordance with the Tender Offer. Shareholders who are in doubt as to the contents of this document or as to the action to be taken should immediately consult their financial adviser.
Expenses
The costs relating to the Tender Offer will be paid by the Company and are expected to be approximately USD 5,000. Shareholders should note this expense will reduce the Net Asset Value per Ordinary Share accordingly.
Overseas Shareholders
The Tender Offer is being made to all Shareholders on the Company's Register of Members (or, where Ordinary Shares are held in Euroclear and/or Clearstream, otherwise beneficially entitled to such Ordinary Shares) on the Record Date. However, it is the responsibility of all Overseas Shareholders to satisfy themselves as to the observance of all legal requirements in their jurisdiction, including, without limitation, all relevant requirements in relation to the ability of such holders to participate in the Tender Offer. Further details relating to Overseas Shareholders can be found at paragraph 10 of Part 2 of the Circular.
Taxation
Shareholders who sell Ordinary Shares in the Tender Offer may, depending on their individual circumstances, incur a tax liability. Shareholders who are in doubt as to their tax position should consult an appropriate professional financial adviser.
Applicable Terms of the Company's Share Purchase Policy
The following terms will apply to the purchase of the Ordinary Shares by the Share Purchase Subsidiary in the Tender Offer:
·; The purchases will be funded by way of an intra-group loan from the Company.
·; The maximum number of the Ordinary Shares that may be purchased in any 12 month period is 25 per cent. of the Company's issued share capital, from time to time.
·; If possible, all sales shall be made at a premium to the last announced Net Asset Value per Ordinary Share, and sales at a discount to the prevailing Net Asset Value per Ordinary Share may only be made with the prior approval of the Board.
·; The Share Purchase Subsidiary must dispose of all Ordinary Shares held before the Company can raise additional funds through the offer and sale of new Ordinary Shares.
·; The maximum number of Ordinary Shares that can be sold by the Share Purchase Subsidiary in any 12 month period is 25 per cent. of the Company's issued share capital, from time to time. This limit can be exceeded only with the prior express approval of the Board.
·; The Share Purchase Subsidiary is prohibited from purchasing or selling Ordinary Shares during 'close periods' (as described in the AIM Rules for Companies).
·; The Share Purchase Subsidiary shall not exercise the voting rights attaching to Ordinary Shares held by it, from time to time.
·; The Share Purchase Subsidiary shall waive the right to receive all dividends or other distributions in relation to Ordinary Shares held by it, from time to time.
·; The Company will promptly announce to the market all purchases and sales of all Ordinary Shares by the Share Purchase Subsidiary without delay.
Action to be Taken
Shareholders who do not wish to participate in the Tender Offer should take no action. There is no cash dividend alternative available to Shareholders in connection with this 2.73 per cent. distribution.
The procedure for tendering Ordinary Shares depends on whether Ordinary Shares are held in uncertificated or certificated form, and is summarised below:
Ordinary Shares held in certificated form (that is, not held though Euroclear and/or Clearstream)
The Tender Form should be completed, signed and returned as described above so as to be received by the Receiving Agent, together with relevant certificates evidencing any such Ordinary Shares and other documents of title, not later than 12.00 midnight on Friday, 16 November 2012. A Shareholder may also apply for more than their Basic Entitlement under the Tender Form pursuant to the Excess Application Facility.
Ordinary Shares held in uncertificated form through Euroclear and/or Clearstream
Euroclear
Shareholders who hold their Ordinary Shares through Euroclear will be notified of the terms of the Tender Offer by Euroclear Bank S.A. as system administrator and should remit their instructions to Euroclear Bank S.A. in the notified manner. The acceptances from Shareholders of Ordinary Shares representing their Basic Entitlement and, if applicable, Excess Shares pursuant to the Excess Application Facility, in Euroclear shall constitute irrevocable instructions to Euroclear Bank S.A. to block any attempt to transfer the Ordinary Shares tendered, so that on or prior to the Settlement Date no transfer of such Ordinary Shares may be effected (other than to the Share Purchase Subsidiary) or the date on which the Tender Offer has been declared unconditional and the Ordinary Shares have been accepted for purchase) and to debit the securities account in which such Ordinary Shares are held on the Settlement Date in respect of the Ordinary Shares tendered and accepted for purchase by the Company, against payment by the Company of the Tender Price in accordance with the terms of the Tender Offer. Ordinary Shares not accepted for purchase by the Company under the Excess Application Facility shall be returned to the tendering Shareholder after the Settlement Date at the Shareholder's risk.
Clearstream
Shareholders who hold their Ordinary Shares through Clearstream will be notified of the terms of the Tender Offer by Clearstream Banking S.A. as system administrator and should remit their instructions to Clearstream Banking S.A. in the notified manner. The acceptances from Shareholders of Ordinary Shares representing their Basic Entitlement and, if applicable, Excess Shares pursuant to the Excess Application Facility, in Clearstream shall constitute irrevocable instructions to Clearstream Banking S.A. to block any attempt to transfer the Ordinary Shares tendered, so that on or prior to the Settlement Date no transfer of such Ordinary Shares may be effected (other than to the Share Purchase Subsidiary) or the date on which the Tender Offer has been declared unconditional and the Ordinary Shares have been accepted for purchase) and to debit the securities account in which such Ordinary Shares are held on the Settlement Date in respect of the Ordinary Shares tendered and accepted for purchase by the Company, against payment by the Company of the Tender Price in accordance with the terms of the Tender Offer. Ordinary Shares not accepted for purchase by the Company under the Excess Application Facility shall be returned to the tendering Shareholder after the Settlement Date at the Shareholder's risk.
DEFINITIONS
The following definitions apply throughout this announcement unless the context otherwise requires:
"Basic Entitlement" | the entitlement of each Shareholder to tender up to 2.73 per cent. of the Ordinary Shares registered in each Shareholder's name on the Record Date (or, where Ordinary Shares are held in Euroclear and/or Clearstream, the entitlement of each person otherwise beneficially entitled to such Ordinary Shares on the Record Date to tender up to 2.73 per cent. of Ordinary Shares so beneficially entitled) rounded down to the nearest whole number;
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"Board" or "Directors" | the directors of the Company;
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"certificated" or "in certificated form" | not in uncertificated form;
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"Clearstream" | the system of paperless settlement of trades and the holdings of shares without share certificates administered by Clearstream Banking S.A.;
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"Company" | Pacific Alliance China Land Limited;
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"Euroclear" | the system of paperless settlement of trades and the holding of shares without share certificates administered by Euroclear Bank S.A.;
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"Excess Application Facility" | the arrangement pursuant to which Shareholders who tender for their full Basic Entitlement may also tender Ordinary Shares in excess of their Basic Entitlement in respect of which valid tenders have not been received from other Shareholders in accordance with the terms and conditions of the Tender Offer;
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"Excess Shares" | such number of Ordinary Shares which are not the subject of valid tenders in respect of a Basic Entitlement under the Tender Offer and which Shareholders who apply to tender their full Basic Entitlement are therefore offered the opportunity to tender Excess Shares under the Excess Application Facility;
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"Investment Manager" | Pacific Alliance Real Estate Limited;
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"London Stock Exchange" | London Stock Exchange plc;
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"Net Asset Value" | the total value of all of the assets of the Company less its liabilities as determined by the Board and calculated in accordance with the Company's accounting policies;
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"Net Asset Value per Ordinary Share" | the Net Asset Value divided by the number of Ordinary Shares then outstanding;
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"Ordinary Shares" | ordinary shares of USD 0.01 each in the capital of the Company;
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"Receiving Agent" | Sanne Trust Company Limited;
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"Record Date" | Friday, 9 November 2012;
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"Register of Members" | the Company's register of Shareholders;
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"Regulatory Information Service" | a primary information provider which has been approved by the UK Financial Services Authority to disseminate regulatory information to the market;
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"Settlement Date" | Monday, 26 November 2012, the date on which the Share Purchase Subsidiary will formally purchase Ordinary Shares validly tendered and accepted pursuant to the Tender Offer in accordance with the terms and conditions of the Tender Offer;
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"Shareholders" | holders of Ordinary Shares (or, where Ordinary Shares are held in Euroclear and/or Clearstream, the persons otherwise beneficially entitled to such Ordinary Shares);
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"Share Purchase Subsidiary" | PACL Trading Limited;
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"Tender Form" | the tender form pursuant to which Shareholders may apply to tender their Basic Entitlement and, if applicable, any Excess Shares under the Tender Offer and which accompanies this document;
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"Tendering Shareholder" | those Shareholders holding Ordinary Shares on the Record Date who have successfully tendered Ordinary Shares pursuant to the Tender Offer and whose names are entered on the Register as at the Settlement Date;
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"Tender Offer" | the conditional invitation by the Company to Shareholders to tender Ordinary Shares for purchase by the Share Purchase Subsidiary on the terms and subject to the terms and conditions stated in this document and the Tender Form;
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