R.E.A. Holdings plc (RE.)
R.E.A. Holdings plc: Further re proposals in respect of 8.75 per cent
guaranteed sterling notes 2020
20-March-2020 / 09:16 GMT/BST
Dissemination of a Regulatory Announcement that contains inside information
according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
R.E.A. Holdings plc ("REA Holdings")
REA Finance B.V. ("REA Finance")
Amendment to the proposals to extend the date for repayment of the 8.75 per
cent guaranteed sterling notes 2020 issued by REA Finance B.V. and
irrevocably and unconditionally guaranteed by R.E.A. Holdings plc and R.E.A.
Services Limited
Introduction
On 6 March 2020, REA Holdings and REA Finance announced proposals regarding
the extension of the date for repayment of the 8.75 per cent guaranteed
sterling notes 2020 issued by REA Finance (the "sterling notes") from 31
August 2020 to 31 August 2025 (the "proposals").
Amendment to the terms of the proposals: premium to be paid on redemption
In light of the current market circumstances arising as a result of the
COVID-19 pandemic, REA Holdings and REA Finance have agreed that the terms
of the proposals be enhanced. With the agreement of Apex Corporate Trustees
(UK) Limited, as trustee for the holders of the sterling notes (the
"noteholders"), REA Finance (as issuer), REA Holdings (as guarantor) and REA
Services (as co-guarantor) agree that the terms of the sterling notes will
be further amended to provide that a premium be paid on redemption of the
sterling notes on 31 August 2025 (or earlier in the event of default) or on
surrender of the sterling notes in satisfaction, in whole or in part, of the
subscription price payable on exercise of the warrants to be issued by REA
Holdings in consideration of (and subject to) noteholders sanctioning the
proposals (the "warrants") on the final subscription date (namely 15 July
2025). The premium will not be payable on redemption of the sterling notes
on surrender of the sterling notes in satisfaction, in whole or in part, of
the subscription price payable on exercise of the warrants on any
subscription date other than the final subscription date. The premium is 4p
per GBP1 nominal of sterling notes.
The other terms of the proposals, and timetable for the proposals, remain as
set out in the circular posted by REA Holdings to noteholders on 6 March
2020 (the "circular") and as set out in the press announcement issued by REA
Holdings and REA Finance on 6 March 2020. It remains expected that the
results of the meeting of noteholders will be announced on 31 March 2020 and
that, subject to the extraordinary resolution to be proposed at such meeting
being duly passed, the proposals will become effective, and binding on all
noteholders, the following day.
Reasons for the amendment
Since the announcement of the proposals on 6 March 2020, concerns about
COVID-19 have escalated dramatically with significant adverse social and
economic consequences in many countries. At this juncture, the group's
estates are operating normally and the group has in place contingency plans
to mitigate any adverse effects should any of its employees become infected
with the virus, although there can be no guarantee that there will be no
disruption.
Crude palm oil ("CPO") prices have weakened further in the last two weeks to
a current level of approximately $600 per tonne (CIF Rotterdam). There are
some signs that Chinese commercial activity is being resumed and, if
confirmed, this can be expected to stabilise the CPO market and to lead in
due course to a recovery in prices given that demand for CPO is expected to
exceed production in 2020.
Against this background, the group considers that it is appropriate to
provide the limited improvement to the terms of the proposed extension to
the repayment date of the sterling notes that is detailed above. By doing
so, the group hopes to retain the continuing support of noteholders going
forward in what may prove difficult financial markets.
Taxation
For United Kingdom corporation tax paying noteholders, the premium on
redemption should be treated as a loan relationship credit, in the same way
as interest on the sterling notes, and the tax treatment will follow the
accounting treatment applied by the noteholder.
For individual noteholders resident and domiciled in the United Kingdom for
tax purposes, the position is fact specific and determined by case law, but
it is likely that the premium on redemption will be treated for tax purposes
as interest and therefore a receipt of an income nature.
The above comments are of a general nature and are based upon REA Holdings'
understanding of current United Kingdom tax laws and the practice of Her
Majesty's Revenue and Customs ("HMRC") as of the date of this document. They
do not purport to be a complete analysis of all tax considerations, relate
only to the position of persons who hold sterling notes as an investment and
are the absolute beneficial owners of sterling notes and may not apply to
certain classes of persons such as dealers, persons who have acquired their
sterling notes by reason of their employment or persons connected with REA
Holdings for relevant tax purposes. Noteholders who are in any doubt as to
their taxation position or who may be subject to tax in a jurisdiction other
than the United Kingdom should consult their own professional adviser.
Meeting of noteholders
To the extent that a holder of sterling notes has not already appointed a
proxy to attend the meeting of noteholders convened for 31 March 2020
(notice of such meeting being set out at the end of the circular), whether
or not such noteholder proposes to attend such meeting, such noteholder is
urged to complete the form of proxy enclosed with the circular in accordance
with the instructions printed thereon and to return the same by post to Link
Asset Services at PXS, 34 Beckenham Road, Beckenham, Kent BR3 4TU, United
Kingdom so as to arrive as soon as possible but in any event by no later
than 11 a.m. (London time) on 29 March 2020 or, in the case of sterling
notes held in uncertificated form, to appoint a proxy through the CREST
electronic proxy appointment service in accordance with the procedures
explained in the notes to the notice of meeting. The appointment of a proxy
will not prevent a holder of sterling notes from attending the meeting and
voting in person if such noteholder should so wish.
Enquiries:
R.E.A Holdings plc
Tel: 020 7436 7877
ISIN: GB0002349065
Category Code: FUR - R.E.A. Holdings plc
TIDM: RE.
LEI Code: 213800YXL94R94RYG150
Sequence No.: 53640
EQS News ID: 1002755
End of Announcement EQS News Service
(END) Dow Jones Newswires
March 20, 2020 05:16 ET (09:16 GMT)
