Infrastructure India plc has announced that on 14 September 2016 it entered into a revised and restated management and valuation and portfolio services agreement with Franklin Park Management, LLC, its existing asset manager, to effect a reduction in annual cash fees payable by IIP to the asset manager. The other terms of the new management agreement are unchanged from those of the prior agreement between the parties.
The Group has re-appointed Franklin Park to provide investment advisory and valuation and portfolio services to the Group on an exclusive basis. The asset manager is now entitled to a fixed annual management fee of GBP5,520,000 per annum, payable quarterly in arrears. In addition to the annual management fee, the asset manager will be issued with 605,716 new ordinary shares in Infrastructure India annually. These shares will be issued free of charge, on 1 July of each calendar year for the duration of the agreement.
Under the prior agreement, the asset manager was entitled to an annual management fee of 2% of the value of the Group’s assets less adjustment for increase in assets purchased from the proceeds of the placing completed by the fund in 2014. Fees for the year ended 31 March 2016 under the previous agreement were GBP5,910,000.
The new management agreement may be terminated for, inter alia, cause by either party or by either party providing the other with twelve months’ written notice, subject to such written notice not being given before 30 September 2019.
Should the new agreement be terminated by way of twelve months’ prior written notice (by either party), the asset manager shall be issued with an additional 151,429 new ordinary shares in the company, free of charge, on the date of termination.
IIP : Infrastructure India agrees new asset management contract