Secure Prop Regulatory News (SPDI)

27 Jul 2009 10:00



AISI Realty Public Limited

"AISI" or "the Company"

Restoration of Trading

Notification of Extraordinary General Meeting

Proposed US$5.4 million Placing to complete the Brovary Warehouse Project

Restoration of Trading

The Company is pleased to announce that the suspension of trading of its Ordinary Shares on the AIM market, which commenced on 30 June 2009, has been lifted with effect from 10:00 a.m. on 27 July 2009. The Restoration of trading follows publication of Report & Accounts for the year ended 31 December 2008. 

Under the AIM Rules, a company that does not publish its Report and Accounts within 6 months of the year end has its shares automatically suspended. The Directors were not able to sign-off on the Company's Report and Accounts for the year ended 30 June 2008 until the completion of a re-financing programme, as detailed below. 

During the period of suspension, the Board has negotiated and secured the injection of additional finance of US$5.4 million, to be provided by way of a placing, into the business. This financing is conditional on shareholder approval to be sought at an Extraordinary General Meeting of the Company. 

Further information on the financing is set out below, together with the notice of the Extraordinary General Meeting of the Company to be held at 10.00 a.m. on 9 August 2009 at Totalserve House, 17 Gr. Xenopoulou Street, Limassol 3106, Cyprus.

Notice of EGM 

Announcement of the Company's annual results to 30 December 2008 preceded this announcement. The annual results have been posted to shareholders together with a circular giving further details on the financing which also includes the notice of the EGM. The annual results and the Circular are all available on the Company's website www.aisicap.com 

Proposed Placing

The Company today announces that it has conditionally placed with new and existing investors 222,081,507 new ordinary shares ("Placing Shares") of €0.01 each ("Ordinary Shares") at a price of 1.5 pence per share thereby raising gross proceeds of US$5.4 million (the "Placing"). The net proceeds of the Placing will be used by the Company solely to progress the completion of the Brovary Warehouse Project, and to pay certain outstanding operating expenses of the Company. The net proceeds of the Placing will not, however, be used to pay any accrued or outstanding annual management fees due to the investment manager.

The New Shares, will represent approximately 54 per cent. of the Company's Enlarged Share Capital.

Background to and reasons for the Placing

On 30 July 2008, Aisi and, together with its subsidiaries made an announcement in respect of its Interim Results for the six months ended 30 June 2008, stating, inter alia, that the Company was making good progress with two of its major logistics developments, including the Brovary warehouse project (the "Brovary Warehouse Project"). In addition, the Company also stated in that same announcement that the Company was considering financing options in the near future for all of its projects.

On 29 June 2009, the Company made a further announcement that it was in discussion regarding financing for the completion of the Brovary Warehouse Project. As a consequence of the ongoing re-financing discussions, the Company was unable to publish its audited report and accounts for the year ended 31 December 2008 (the "2008 Report and Accounts") before 30 June 2009 and accordingly the trading in its Ordinary Shares on AIM were suspended until such time as it was able to publish the 2008 Report and Accounts.

The Company is now seeking to raise approximately US$5.4 million of capital through a new issue of Ordinary Shares in the Company, to certain existing Shareholders and new investors, in order primarily to provide funding to complete the Brovary Warehouse Project.

Background to the Brovary Warehouse Project

The Brovary Warehouse Project, located approximately 30 km from Kiev city centre on the intersection of two major highways leading north-east to Moscow and south to Kiev-Borispil airport, is close to completion and it is anticipated that it will complete in under three months' time.

While the Company has a current approved loan facility for the Brovary Warehouse Project, to date it has not drawn down any of the facility due to delays in accessing the first tranche of US$34.4 million (which was approved by the European Bank of Reconstruction and Development ("EBRD") in January 2009). The Company has been advised by EBRD that it is willing to provide US$13.25 million without the participation of other banks (by way of a syndicated loan) provided that the Company meets EBRD's equity requirement for the Company to raise a further US$4.25 million.

In order to assist the completion of the Brovary Warehouse Project (in addition to providing the Company with additional working capital) the Company is seeking to raise by way of the Fund Raising sufficient financing for the completion of the Brovary Warehouse Project (the Company's most imminent cash flow-generating asset) which has been pre-leased for 10 years to a leading local logistics operator and is due for completion and occupancy by the tenant in the fourth quarter of 2009, and which, it is anticipated, will provide the Company with sufficient working capital to progress its remaining projects.

Use of proceeds

The net proceeds of the fund raising will be used by the Company solely to progress the completion of the Brovary Warehouse Project, as outlined above, and to pay certain outstanding operating expenses of the Company. The net proceeds of the fund raising will not, however, be used to pay any accrued or outstanding annual management fees due to the Company's investment manager. Receipt of the net proceeds of the fund raising should, in the opinion of the Board, enable the Company to satisfy all of EBRD's requirements for the release of US$13.25 million under the loan facility.

Future structure of the Company

The Company has undertaken discussions with certain major Shareholders, during the course of which the question has been raised as to whether the Company's current structure, as an externally managed investment company with a purely non-executive board, remains the best operating structure for the Company. Following these discussions, the Board agrees to conduct an immediate restructuring review of the Company's operations; to include internalising the current external management function. Such a change in structure would effectively convert the Company into the holding company of a Ukrainian property development group.

Following the completion of this review, the Board will write to Shareholders to detail the review process and considerations, and to set out its conclusions and recommendations.

Issue of New Shares

An EGM Circular has today been sent to Shareholders in the Company. The issue of the Placing Shares is conditional, inter alia, upon the Company obtaining approval from its Shareholders to grant the Board authority to allot the Placing Shares.  The Placing is further conditional upon Admission of the Placing Shares to AIM.

Application will be made to the London Stock Exchange for the New Shares to be admitted to trading on AIM. It is expected that such Admission will become effective and that dealings will commence on 11 August 2009.

The New Shares will, when issued, rank pari passu in all respects with the existing Ordinary Shares, including the right to receive dividends and other distributions declared following Admission. 

Enquiries:

Seymour Pierce Limited, which is regulated by the Financial Services Authority and is a member of the London Stock Exchange, is acting as nominated adviser and broker exclusively for the Company in connection with the Placing. Its responsibilities as the Company's nominated adviser under the AIM Rules are owed solely to the London Stock Exchange and are not owed to the Company or to any Director or any other person in respect of his decision to acquire ordinary shares in the Company in reliance on any part of this announcement. No representation or warranty, express or implied, is made by Seymour Pierce Limited as to any of the contents of this announcement for which the Directors and the Company are responsible (without limiting the statutory rights of any person to whom this announcement is issued). Seymour Pierce Limited has not authorised the contents of, or any part of, this announcement, and no liability whatsoever is accepted by Seymour Pierce Limited for the accuracy of information or opinions contained in this announcement or for the omission of any material information. Seymour Pierce Limited will not be offering advice and will not otherwise be responsible for providing customer protections to recipients of this announcement in respect of the Placing or any acquisition of shares in the Company.