Worsley Inv Ltd Regulatory News (WINV)

AXA Property Trust Ltd - Notice of EGM

PR Newswire

London, August 9

AXA Property Trust

RIS announcement re Announcement of EGM

and Portfolio Update

AXA Property Trust Limited

("APT" or the "Company")

LEI Number: 213800AF85VEZMDMF931

9 August 2018

Recommended proposals for the voluntary liquidation of the Company and cancellation of the admission of its Shares to the Official List of the UK Listing Authority and to trading on the Main Market of the London Stock Exchange

Notice of Extraordinary General Meeting

1. INTRODUCTION AND BACKGROUND

The Company has been in managed wind-down since 26 April 2013 during which time the Company has realised the Portfolio in an orderly manner and has distributed the realisation proceeds to Shareholders. There is now only one asset, the Curno property, remaining in the Portfolio.

An update on the discussions with the tenant at the Curno property was last reported on as at 29 May 2018. Since this date these discussions have continued although there is not yet an agreement secured with the tenant. Whilst the Investment Manager is confident an agreement will be forthcoming in the next three months, the prospects for disposing of the asset remain very weak until the leasing position with the tenant has been resolved. Moreover, and until the terms are finalised with the tenant, there continues to be uncertainty as to the impact of these negotiations on the valuation of the property. This is reflected in the valuation of the Curno property as at 30 June 2018 which has been reported by the independent valuers, Knight Frank, at €8.9 million, compared to a valuation of €11.35 million as at 31 March 2018. This is a reduction of €2.45 million, or 9.29 pence per share using the closing exchange rate of €1.129/£1 as at 30 June 2018.

Further to the announcement on 22 June 2018 and in light of the Company's current position, the Board has now unanimously agreed that it is in the best interests of the Company and its Shareholders to wind up the Company voluntarily in accordance with the Companies Law, appoint Linda Johnson and Ashley Paxton of KPMG Channel Islands Limited as Liquidators and to cancel the admission of its shares to listing on the Official List of the UK Listing Authority and to trading on the London Stock Exchange.

In reaching their decision to recommend the winding-up of the Company, the Directors have considered the Company's operating cost structure having regard to the uncertain prospects of achieving a sale of the Curno property. As a result of this analysis the Board considers there are significant cost savings that will be achieved by placing the Company into voluntary liquidation. These savings are expected to be in the region of £275,000 in the first year, after allowing for the one-off expenses incurred in relation to the Proposals, and in the region of £360,000 for the following and subsequent years. In view of the Net Asset Value of the Company reported as at 31 March 2018 as well as the future cashflow generation of the Curno property, these savings are considered to outweigh the benefits of retaining the existing operating structure of the Company and its listing.

The Board is therefore putting forward the Proposals for approval by Shareholders at the EGM which, if approved, would commence the voluntary winding-up of the Company.

Further details of the Proposals, which require Shareholder approval, are set out in section 2 below.

A Circular will be published shortly which sets out details of, and seeks Shareholder approval for, the Proposals and explains why the Board is recommending that Shareholders vote in favour of the Resolutions to implement them.

2. PROPOSALS

The purpose of the Circular will be to convene an Extraordinary General Meeting of the Company. At the EGM, the Board proposes:

(i) that the Company be wound up voluntarily;

(ii) to appoint Linda Johnson and Ashley Paxton of KPMG Channel Islands Limited as joint liquidators to the Company (the "Liquidators"), with a view to effecting the voluntary liquidation of the Company; and

(iii) to cancel the admission of the Shares to listing on the UKLA Official List and to trading on the Main Market of the London Stock Exchange,

(together, the "Proposals").

The Proposals will, if approved, result in the voluntary liquidation of the Company. It is anticipated that upon the appointment of the Joint Liquidators, there will be an assessment of distributable funds (if any) having regard to current liabilities, costs and expenses (including the costs of the Company's liquidation) as well as any cash reserves which may be released for distribution upon the finalisation of liquidating parts of the Company’s German corporate subsidiaries, expected during Q3 2018. This assessment will be conducted within 30 days of the date of appointment of the Joint Liquidators, followed by an announcement in respect to the timing of the next distribution. The Liquidators will make the first distribution (after providing for the Retention, as defined below) as soon as practicable following their confirmation of the NAV. No financial statements of the Company or updated NAV will be prepared for the financial year ended 30 June 2018 or subsequent years.

It is anticipated that, subject to the continued review of the Company’s financial position by the Joint Liquidators, there will be a further distribution to the Shareholders at the conclusion of the sale of the Curno property. This is not expected before Q1 2019 and will be dependent on the timing of the lease negotiations with the tenant and consequently the timing of any sale, as well as the amount of disposal proceeds generated. On this basis, it is anticipated that the final liquidation of the Company will be completed by the end of Q1 2020. However, these dates are estimates and there can be no guarantee that the liquidation process will not be delayed.

The board understands that the intention of the Liquidators remains to seek the sale of the Curno property.

Shareholders should note that the Proposals, if approved, will not have the effect of placing the Company’s remaining subsidiaries into voluntary liquidation. Accordingly, the implementation of the Proposals, if approved, is not anticipated to have a material adverse impact on the valuation of the Curno property and the sale of the Curno property will take place in the ordinary course and Shareholders should not consider it to be a “fire sale”.

If the Resolutions are approved by Shareholders at the EGM, (i) the Real Estate Advisory Agreement dated 14 March 2006 between the Company, Property Trust Limited Luxembourg 1, S.À.R.L. and AXA Real Estate Investment Managers UK Limited ( the “REAA”) and (ii) the Investment Management Agreement dated 18 April 2005 between the Company and AXA Investment Managers UK Limited (the “IMA”), both as amended pursuant to an amendment dated 26 April 2013, will each be terminated following the cancellation of listing and trading of the Shares on the Main Market. As a result, all existing local advisory agreements and asset management agreements at the level of the Company’s subsidiaries with AXA Real Estate Investment Managers UK Limited and/or its affiliates will automatically terminate.

Following the cancellation of listing and trading of the Shares on the Main Market, it is intended that a new asset management agreement ("AMA") will be entered into between the Company’s subsidiary, Multiplex 1 Srl and AXA Real Estate Investment Managers Italia Srl ("AXA REIM Italia") pursuant to which AXA REIM Italia will provide asset management services in relation to the Curno property pending its disposal. The purpose of the AMA will be to continue to manage the Curno property and effect a realisation in a timely manner. The scope of the services under the AMA is expected to be substantially the same as the scope under the existing AXA REIM Italia asset management agreement.

In view of the proposed change to the role and duties of AXA Investment Managers and its various affiliates, the fees payable to AXA REIM Italia in respect of the new AMA will, with effect from the date of appointment of the Joint Liquidators, be as follows:

· an asset management fee of 0.50% of the gross market valuation of the property (as opposed to 1.10% of NAV at present) per annum to be paid quarterly in arrears initially based on the gross market value of the Curno property as at 30 June 2018;

· a transaction fee of 0.50% of the gross sale price achieved on a sale of the asset within nine months of the date of appointment of the Joint Liquidators (as opposed to a current transaction fee of 0.35% regardless of when a sale occurs); and

no transaction fee shall be payable should a sale occur more than nine months after the date of appointment of the Joint Liquidators.

The Board considers that the proposed changes will incentivise AXA REIM Italia to finalise discussions with the tenant and achieve a disposal of the property within a reasonable timeframe.

2.1 Suspension and cancellation of admission of the Shares to the Official List of the UK Listing Authority and to trading on the Main Market

The register of members will be closed at 6.00pm on 6 September 2018 and the Shares will be disabled in CREST at the start of business on 7 September 2018. Accordingly, to be valid, all transfers must be lodged before 6.00pm on 6 September 2018. Application will be made to the UKLA for suspension of listing of the Shares on the UKLA Official List and application will be made to the London Stock Exchange for suspension of trading in the Shares, in each case, at 7.30am on 7 September 2018. The last day for dealings in the Shares on the London Stock Exchange on a normal rolling two day settlement basis will be 4 September 2018. After 4 September 2018, dealings should be for cash settlement only and will be registered in the normal way if the transfer, accompanied by the documents of title, is received by the Registrars by close of business on 6 September 2018. The record date, being the date for determining which Shareholders are entitled to receive liquidation distributions, is close of business on 6 September 2018.

Transfers received after the time specified above will be returned to the person lodging them and, if the Resolutions are passed, the original holder will receive any proceeds from distributions made by the Liquidators.

If the Resolutions relating to the Proposals are passed, the Company will make applications for the cancellation of the admission of the Shares to listing on the UKLA Official List and to trading on the Main Market following the EGM with the cancellations expected to take effect at 8.00am on 10 September 2018.

After the liquidation of the Company and the making of the final distribution to Shareholders (if any), existing certificates in respect of the Shares will cease to be of value and any existing credit of the Shares in any stock account in CREST will be redundant.

2.2 Costs of the Proposals

It is anticipated that the expenses incurred in relation to the Proposals are currently estimated to amount to approximately £80,000, including professional advice and regulatory expenses. These exclude the fees and expenses of service providers in the ordinary course of business up to the date of the Liquidators' appointment in accordance with the terms of their engagement.

3. EXTRAORDINARY GENERAL MEETING

The Proposals are subject to Shareholder approval. Notice convening the Extraordinary General Meeting, to be held at the offices of Northern Trust International Fund Administration Services (Guernsey) Limited, Trafalgar Court, Les Banques, St. Peter Port, Guernsey GY1 3QL at 12.00pm on 7 September 2018, will be published shortly. The Notice includes the full text of the Resolutions.

In order to become effective, the Resolution to voluntarily wind up the Company must be approved by a majority of not less than seventy five per cent. of the votes cast by Shareholders who, being entitled to vote, are present in person or by proxy at the EGM. The Resolutions to appoint the joint liquidators must be approved by a simple majority of the votes cast by Shareholders who, being entitled to vote, are present in person or by proxy at the EGM.

4. CONSEQUENCES OF THE PROPOSALS NOT BEING APPROVED

If the Proposals are not approved, the Proposals will not be implemented and the Board shall consult with Shareholders as to the future course of action. In doing so, the Board shall be required to consider the probability of a reduced level of rental income available to service the Company’s current operating expense structure. 

5. RECOMMENDATION

The Board unanimously considers that the Proposals are in the best interests of Shareholders as a whole. The Board recommends that Shareholders vote in favour of the Resolutions, as the Directors intend to do in respect of their own beneficial holdings of Shares which, in aggregate, amount to 67,009 Shares, representing approximately 0.286 per cent. of the total voting rights in the Company.

EXPECTED TIMETABLE OF EVENTS

The anticipated dates and sequence of events relating to the implementation of the Proposals are set out below:

Each of the times and dates in the expected timetable of events may be extended or brought forward without notice. If any of the above times and/or dates change, the revised time(s) and/or date(s) will be notified to Shareholders by an announcement through an RIS provider. All references are to London time unless otherwise stated.

* Please note that the latest time for receipt of the Forms of Proxy is 48 hours (excluding any part of a day which is not a Business Day) prior to the time allotted for the meeting.

** The Liquidators will make their assessment of the amount of the first distribution (after providing for the Retention) within 30 days of the date of appointment of the Joint Liquidators, followed by an announcement in respect to the timing of the next distribution.

Company website:retail.axa-im.co.uk/axa-property-trustAll Enquiries:Investment ManagerAXA Investment Managers UK LimitedBroker Services7 Newgate StreetLondon EC1A 7NXUnited KingdomBrokerStifel Nicolaus Europe Limited150 CheapsideLondon EC2V 6ETUnited KingdomTel: +44 (0)20 7710 7600Company SecretaryNorthern Trust International FundAdministration Services (Guernsey) LimitedPO Box 255Trafalgar CourtLes BanquesSt Peter PortGuernsey GY1 3QLChannel Islands