Globalworth is to raise €200m at €8 per share a 12.6% discount to its NAV. This means value is being transferred from existing investors to the new investors. The net asset value will be diluted. The shares have risen on the news, possibly reflecting the good news that it will now have enough money to develop its Globalworth campus project and/or maybe the news of a new dividend policy.
The buyers are Growthpoint Properties Limited (GRT) and certain funds and/or accounts managed by Oak Hill Advisors (Europe), LLP and its affiliates. Growthpoint Properties International Proprietary Limited will conditionally subscribe for 23,300,000 shares and Oak Hill will conditionally subscribe for 1,700,000 shares. As a term of the Subscription, the Company is issuing an initial tranche of 1,000,000 “Fee Shares” to GRT and 72,961 Fee Shares to Oak Hill, and a further tranche of 1,000,000 Fee Shares to GRT and 72,962 Fee Shares to Oak Hill by no later than 31 December 2017. GRT will initially own approximately 26.88% of the enlarged issued share capital of the Company. After taking into account the remaining 1,000,000 Fee Shares to be issued to GRT and the 72,962 Fee Shares to be issued to Oak Hill in 2017, GRT will own 27.66%, of the enlarged issued share capital of the Company (assuming no other issue of Shares and no other acquisition or any disposal by GRT of Shares). Oak Hill will own approximately 11.25% of the enlarged issued share capital of the Company. After taking into account the remaining 1,000,000 Fee Shares to be issued to GRT and the 72,962 Fee Shares to be issued to Oak Hill in 2017, Oak Hill will own approximately 11.20%, of the enlarged issued share capital of the Company (assuming no other issue of Shares and based on its current shareholding and assuming no other acquisition or any disposal by Oak Hill of Shares).
Shareholders get the chance to oppose the deal which is part of a broader package of proposals that the company intends to put to shareholders including the adoption of New Articles, alterations to its governance arrangements and adapting the dividend policy to distribute, subject to solvency or other legal requirements, not less than 90% of the Company’s funds from operations on a semi-annual basis.
Warrants in respect of, in aggregate, 1,500,000 shares (approximately 1.56% of the Company’s enlarged issued share capital post admission of the new shares) held by Zorviani Limited (a company beneficially owned by the Company’s CEO Mr Ioannis Papalekas) will be transferred to GRT.
A relationship agreement between Mr Ioannis Papalekas and the company will be terminated. The company will then enter into new relationship agreements with Zakiono Enterprises Limited (a company beneficially owned by Mr Ioannis Papalekas, which holds 22,733,792 Shares in which Mr Ioannis Papalekas is interested, relating to the manner in which those shares are voted or disposed of) and a separate new relationship agreement with Mr Ioannis Papalekas relating to the management of competing business interests.
There is no explanation as to why they didn’t consider structuring the deal as a rights issue underwritten by GRT and Oak Hill which would have protected existing shareholders and achieved substantially the same result for Globalworth.
GWI : Globalworth in another dilutive issue