TCA.L Regulatory News (TCA)

 Announcement

Not for distribution in or into the United States, Canada, Australia, South Africa or Japan

SPEYMILL MACAU PROPERTYCOMPANY PLC

30 April 2012

Proposed Tender Offer and Restructuring including Change of Name

Introduction

The Board of Speymill Macau Property Company plc (the "Company") announces that it is today posting to Shareholders a circular ("Circular") setting out proposals for:

·; a proposed Restructuring of the Company pursuant to which, inter alia, the Company will vary its investment objective and investing policy and will appoint Terra Partners Asset Management Limited as its external investment manager;

·; a proposed Tender Offer pursuant to which the Company will purchase Ordinary Shares in issue at a Tender Price of US$0.835 per Ordinary Share;

·; a proposed amendment to the previously approved Directors' Incentive Plan; and

·; the proposed change of the Company's name to Terra Capital Plc.

The implementation of each element of the Proposals is subject to the approval of Shareholders. Such approval will be sought at the Extraordinary General Meeting ("EGM") which has been convened for 1.00 p.m. on 24 May 2012 at the offices of Galileo Fund Services Limited, Millennium House, 46 Athol Street, Douglas, Isle of Man, IM1 1JB (notice of which is set out in the Circular).

Background to and reasons for the Tender Offer and Restructuring

The proposed Tender Offer

Following the completion of the sale of the Company's last real estate asset in Macau, the AIA Tower, the Company now has cash available to fund a cash exit for those Shareholders who so elect, on the terms of the Tender Offer described below.

The Directors have determined that the most efficient manner to return cash to Shareholders is by way of the conditional Tender Offer to be proposed to Shareholders at an EGM. Under the terms of the proposed Tender Offer, which is conditional inter alia upon the passing of the Resolutions to be proposed at the EGM, Shareholders will have the opportunity to tender all their Ordinary Shares (or any lesser number of Ordinary Shares) for repurchase by the Company. The price payable in cash by the Company for Ordinary Shares validly tendered under the Tender Offer will be US$0.835 per Share, which represents a discount of 2 per cent. to the sum of the audited Net Asset Value per Share as at 31 December 2011 once the US$0.30 already distributed to Shareholders is taken into account. It should be noted that the audited Net Asset Value as so stated, and following discussion with the Company's auditors, reflects provisions for certain contingent liabilities which have been provided for on a prudent basis. These provisions amount, in aggregate, to approximately US$450,000 or US$0.004 per Share. Insofar as the contingent liabilities reflected by these provisions do not crystallise, any incremental impact upon the Net Asset Value will accrue to the benefit of the Shareholders at the relevant time and no further consideration will be paid under the Tender Offer.

The Ordinary Shares purchased by the Company under the Tender Offer will be held in treasury (to the extent permissible under Isle of Man law) or cancelled at the discretion of the Directors. The Tender Offer, if implemented, will be open to Shareholders on the Register at 5.30 p.m. on 28 May 2012.

Under the Tender Offer, if implemented, Shareholders will be entitled to sell any amount up to 100 per cent. of their shareholdings. They may tender to sell less than this number. If a Shareholder tenders all or part of his or her Shareholding, such tender will, subject to the terms and conditions of the Tender Offer, be satisfied in full.

The Tender Offer and Restructuring are conditional upon, inter alia, the Company receiving tenders in respect of no more than 60 per cent. of the issued Ordinary Share capital of the Company. If the Company receives tenders in excess of 60 per cent. of the issued Ordinary Share capital of the Company, neither the Tender Offer nor the Restructuring shall proceed and the Company shall put proposals for the winding up of the Company to Shareholders for their approval. In any event, under the AIM Rules, the Ordinary Shares would be suspended from trading on AIM if the Company does not implement a new investing policy by 1 February 2013.

Full details of the Tender Offer, including the terms and conditions on which it is being made and the procedure for tendering shares, whether held in certificated or uncertificated form (that is, in CREST), are set out in Part 5 of the Circular and, for Shareholders who hold their Shares in certificated form, in the Tender Form which is also being sent to such Shareholders.

The Restructuring

Following discussions with a number of Shareholders it has become apparent to the Directors that a majority of Shareholders by value would like to maintain their investment in the Company and would favour the continuation of the life of the Company following the adoption of the proposed new investment objective and investing policy. This restructuring of the Company would be undertaken in conjunction with the appointment of an external investment manager, being Terra Partners Asset Management, a company owned by Howard Golden, Fillip Montfort and Yarden Mariuma, three of the four existing Directors.

All elements of the proposed Restructuring will be subject to Shareholder approval at the EGM and any Shareholders who do not wish to retain their investment in the Company post the Restructuring (if implemented) will, subject to the passing of the Resolutions at the EGM, be able to realise their investment in the Company completely through the Tender Offer.

The Company has received indications from Shareholders in respect of more than 92 million Ordinary Shares (representing more than 85 per cent. of the issued share capital) that they currently intend to vote in favour of all the Resolutions to be proposed at the EGM. The Company has also received indications from Shareholders in respect of, in aggregate, approximately 68.3 million Ordinary Shares (representing approximately 63 per cent. of the issued share capital) that they currently do not intend to participate in the Tender Offer.

Amendment to the Directors' Incentive Plan

At the extraordinary general meeting of the Company held on 19 November 2010, Shareholders approved the adoption of the Directors' Incentive Plan. Under the Directors' Incentive Plan the Directors are entitled to receive a fee equal to 0.6 per cent. of any future "Distributions" made by the Company during its life, payable at the time of such Distribution. "Distribution" was defined widely to include share buy backs, all forms of return of capital and distributions in specie. The fee in respect of the US$0.30 previously distributed to Shareholders has already been paid.

The intention of the Directors' Incentive Plan was to incentivise the Board to realise the Company's assets remaining at that time, of which the largest was the AIA Tower, thus aligning the Board's interests with the interests of Shareholders. At the time it was adopted, it was envisaged that the Company would be wound up once the last assets were sold, and accordingly the entitlement to fees under the Directors' Incentive Plan was to be triggered by the distribution to Shareholders of the net realisation proceeds. If the proposal to extend the Company's life and adopt a new investing policy is approved by Shareholders at the Extraordinary General Meeting, it is therefore proposed that the fees payable to the Directors under the Directors' Incentive Plan will be paid by reference to the total amount of cash being made available to Shareholders under the Tender Offer, being US$89.5 million, regardless of the extent to which Shareholders elect to receive that cash.

It is the intention of Messrs Golden, Mariuma and Montfort to invest an amount equal to the money they will receive under the Directors' Incentive Plan, as amended, to acquire further Ordinary Shares.

This consequential amendment is being made subject to the approval of Shareholders in a separate resolution, Resolution 5 to be proposed at the EGM.

All the Directors are interested in the Directors' Incentive Plan and the proposed amendment thereto. Under the AIM Rules, the proposed amendment of the Directors' Incentive Plan is categorised as a "related party transaction". Consequently, the Board has consulted Matrix, the Company's nominated adviser, who has confirmed that they consider that the terms of the proposed amendment to the Directors' Incentive Plan are fair and reasonable so far as Shareholders are concerned.

Background to and reasons for the Restructuring

After discussions with the majority of Shareholders (by value), it has become apparent that they are pleased with the performance of the Existing Directors and would favour the continuation of the life of the Company with a new investment objective, investing policy and an external investment manager which is owned and controlled by the majority of the Existing Directors. Accordingly, subject to the passing of the Resolutions at the EGM, the Company will be restructured as follows:

Adoption of new Investment Objective and Investing Policy

The Company will adopt a new investment objective and investing policy which will be to achieve capital appreciation while attempting to reduce risk primarily by applying a disciplined and diversified value investing philosophy. The Company intends to invest a large percentage of its assets in a variety of smaller and overlooked markets that lack significant foreign institutional analysis. Further details relating to the Company's proposed new investment objective and investing policy are set out in Part 2 of the Circular.

Appointment of the Proposed Directors and resignation of the Existing Directors

The Existing Directors currently comprise Howard Golden, Filip Montfort, Yarden Mariuma and Harald Wengust. Upon completion of the Restructuring Howard Golden, Yarden Mariuma and Harald Wengust will resign from the Board and Dirk Van den Broeck and Ian Dungate will be appointed as the new non-executive Chairman and non-executive Director respectively. Biographical details for Filip Montfort and the Proposed Directors are set out in Part 2 of the Circular.

Appointment of Terra Partners Asset Management Limited

Conditionally upon the completion of the Tender Offer, Terra Partners Asset Management Limited will be appointed as the Company's external investment manager pursuant to the terms of the Investment Management Agreement.

Terra Partners Asset Management Limited is owned and controlled by Howard Golden, Filip Montfort and Yarden Mariuma (the "Conflicted Directors"). Under the AIM Rules, the entering into of the Investment Management Agreement is categorised as a "related party transaction". Consequently, the Conflicted Directors have abstained from the Board's decision to enter into the Investment Management Agreement. Accordingly, Harald Wengust, in his capacity as the independent director on the Board, having consulted with Matrix, the Company's nominated adviser, considers that the terms of the appointment of Terra Partners Asset Management Limited as the Company's investment manager are fair and reasonable so far as Shareholders are concerned.

Change of name to Terra Capital Plc

As part of the Restructuring, it is proposed that the Company's name be changed to "Terra Capital Plc".

Overseas Shareholders

The proposed Tender Offer will not be available to Shareholders with a registered address in a Restricted Jurisdiction. Overseas Shareholders should note that they should satisfy themselves that they have fully observed any applicable legal requirements under the laws of their relevant jurisdiction if they tender Ordinary Shares in the proposed Tender Offer. The attention of Shareholders with registered addresses outside the United Kingdom is drawn to the paragraph headed "Overseas Shareholders" in Part 4 of the Circular.

Extraordinary General Meeting

The implementation of the Proposals requires, inter alia, the passing of the Resolutions which will be proposed at the EGM. A notice convening the EGM to be held at the offices of Galileo Fund Services Limited, Millennium House, 46 Athol Street, Douglas, Isle of Man, IM1 1JB on 24 May 2012 at 1.00 p.m. is set out at the end of the Circular. At this meeting, Shareholders shall be asked to authorise the Company to repurchase Ordinary Shares, to enable the Tender Offer to take place, and to approve the Restructuring.

A copy of the Circular is, or will shortly be, available on the Company's website which is www.speymillmacau.com. Terms defined in the Circular have the same meaning when used herein unless the context otherwise requires.

- ENDS -

Enquiries

For more information, please visit www.speymillmacau.com or contact:

Speymill Macau Property Company plc

Howard Golden, Chairman

+ 9725 2601 7615

Galileo Fund Services Limited

(Administrator)

Ian Dungate

+44 1624 692600

Matrix Corporate Capital LLP

(Nominated adviser and corporate broker)

Paul Fincham

Jonathan Becher

+44 20 3206 7000