Real Est.cred Regulatory News (RECI)

4 Dec 2007 15:24

Queen's Walk Investment Limited04 December 2007 THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION DIRECTLY OR INDIRECTLY IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN Queen's Walk Investment Limited (the "Company") Announcement of Tender Offer Introduction Queen's Walk Investment Limited (the "Company") announces that it has today senta circular (the "Tender Offer Circular") to Eligible Shareholders (as defined inthe Tender Offer Circular) detailing its proposed tender offer to purchase up to24.99 per cent. of its Ordinary Shares and thereby to return a maximum of €15million in cash to shareholders (the "Tender Offer"). The Tender Offer will be open from 4 December to 3.00 p.m. on 17 December 2007and is being made at a price per existing ordinary share in issue ("OrdinaryShare") of up to €6.30 (the "Maximum Price"). The Maximum Price represents apremium of approximately 35.48 per cent. over the middle market closing price(as derived from the Daily Official List of the London Stock Exchange) of €4.65per Ordinary Share on 30 November 2007. The Tender Offer is conditional on the approval of shareholders at theextraordinary general meeting of the Company to be held at 12.30 p.m. on 8January 2008. The Tender Offer is only available to Eligible Shareholders inrespect of the number of Ordinary Shares registered in those shareholders' namesat 5.00 p.m. on 17 December 2007 (the "Record Date"). Background to and reasons for the Tender Offer The Ordinary Shares are traded on the main market of the London Stock Exchangeand the Company undertook a tender offer earlier in the year under which itrepurchased for cancellation 4,504,500 Ordinary Shares. In addition, the Companyhas a policy of buying back its Ordinary Shares in the market for cancellation.However, the number of Ordinary Shares which the Company has been able torepurchase has been constrained by applicable limits on the number of OrdinaryShares that can be purchased on any particular day and by the price at which theCompany can repurchase Ordinary Shares and the Ordinary Shares continue to bepriced at a discount to their underlying net asset value. In arriving at themaximum number and price range of Ordinary Shares to be repurchased, the Boardof the Company has taken account of current market conditions which haveincreased the volatility surrounding the fair value of the Company's portfolio.The Company remains comfortable in the cash generative capability of its assetsand believes that the cash available to the Company is sufficient to continuewith the Tender Offer within the parameters specified. In order to ensure an orderly market for the Ordinary Shares the Buy BackAuthority will not be utilised from and including 4 December 2007 until theTender Offer is closed or terminated. Following the Tender Offer being closed orterminated, the Company intends to continue to buy back shares under the BuyBack Authority and, when doing so, will consider, on any particular day, buyingback a number of Ordinary Shares which exceeds 50% of the Company's averagedaily trading volume over the prior 20 trading days. The Tender Offer The Tender Offer Circular which contains the formal terms and conditions of theTender Offer, and a tender form, containing instructions to shareholders on howto tender their Ordinary Shares should they choose to do so, were today sent toshareholders. The Company is proposing to return up to €15 million in cash through a purchaseof not more than 24.99 per cent. of its existing Ordinary Shares. Oncepurchased, those Ordinary Shares will be cancelled and will not be available forre-issue. The Tender Offer is being made available to Eligible Shareholders on theregister of members at the Record Date specified below. Eligible Shareholdersmay participate in the Tender Offer by tendering all or a proportion of theOrdinary Shares held by them at the Record Date. Director's intentions The Directors who are beneficially interested in Ordinary Shares have indicatedthat they will not tender Ordinary Shares pursuant to the Tender Offer. The Company has been informed on behalf of Cheyne ABS Opportunities Fund L.P.that, with the support of its largest investor, Cheyne Special Situations FundL.P., it will not be participating in the Tender Offer. Cheyne ABS OpportunitiesFund L.P. is the holder of 17,900,756 Ordinary Shares representing approximately51.3 per cent. of the issued Ordinary Shares. Expected timetableTender offer opens 4 DecLatest time and date for receipt of Tender Forms 3 p.m. on 17 DecRecord Date for the Tender Offer 5 p.m. on 17 DecAnnouncement of Strike Price 18 DecLatest time and date for receipt of the Form of Proxy 12:30 p.m. on 6 JanExtraordinary General Meeting 12.30 p.m. on 8 JanAnnouncement of result of Extraordinary General Meeting 8 JanCREST accounts credited with Tender Offer proceeds and revised 15 Janholdings of uncertificated Ordinary SharesDispatch of cheques for Tender Offer proceeds for certificated 15 JanOrdinary SharesDispatch of balance share certificates for unsold Ordinary Shares and 15 Janshare certificates for unsuccessful tenders (certificated holdersonly) Current trading On November 28 2007, the Company announced its results for thequarter ending 30 September 2007. The net asset value of the Company's portfolioas at 30 September 2007 was €6.90 per share. Since 30 September 2007, volatilityin the European ABS markets has continued to increase significantly as capitalhas been withdrawn from the sector. Significant market events outside of theCompany's control may cause the discount rates applied by market participants tothe UK, European and SME residuals to widen. While a widening of discount rateswould not affect the cash generative capability of the Company's residuals, thismay have a material impact on the Company's NAV in future periods. The Company's net leverage as at 30 September 2007 was 8.60% and will increasefollowing the completion of the Tender Offer. Copies of the Tender Offer Circular together with relevant documents relating tothe extraordinary general meeting to be held on 8 January 2008 will be availablefor inspection at the UK Listing Authority's Document Viewing Facility which issituated at the Financial Services Authority, 25 The North Colonnade, CanaryWharf, London E14 5HS. Copies of these documents can be obtained from theCompany Secretary. For further information please contact: Investor Relations: Caroline Villiers +44 (0) 20 7153 1521 Company Secretary: Kleinwort Benson (Channel Islands) Fund Services Limited +44 (0) 14 8172 7111 About Queen's Walk Queen's Walk Investment Limited is a Guernsey-incorporated investment companylisted on the London Stock Exchange. The Company's investment objective is topreserve capital and to provide stable returns to shareholders in the form ofquarterly dividends. To achieve this, Queen's Walk invests primarily in adiversified portfolio of subordinated tranches of asset backed securities,including the unrated "equity" or "first loss" residual income positiontypically retained by the banks or other financial institutions which haveoriginated the loan assets that collateralise a securitisation transaction. TheCompany makes such investments where its investment manager, Cheyne CapitalManagement Limited, considers the coupon or cash flows from the investment to beattractive relative to the credit exposure of the underlying asset collateral. This information is provided by RNS The company news service from the London Stock Exchange