The board of Raven Property Group, the owner of warehouses in Russia, has proposed a de-listing of its shares after the war in Ukraine and subsequent sanctions on Russia “have made it impracticable for the business to continue in its current form”.
The board has entered into an arrangement to allow it to divest itself of its Russian business to Prestino Investments Ltd, a Cypriot company, to be owned and controlled by Raven’s Russian management team.
In the meantime and as a result of the company’s inability to accurately assess its current financial position, it has suspended its ordinary shares and preference shares to trading on the London Stock Exchange effective today. Similar suspensions will apply to the company’s listings on TISE, JSE and MOEX.
The transaction
The transaction is structured as a put option for nominal cost, to allow the disposal of the entire issued ordinary share capital to its Russian management team, for nominal consideration.
Raven’s ability to exercise the put option will be conditional on the company’s cancellation of the London listing of its ordinary shares and the subsequent completion of the disposal will be conditional on regulatory and other approvals.
As part of the transaction, Raven will retain an economic interest in the company via existing unsecured loans of £41m and Rub1.1bn and non voting preference shares of £678m, attracting a coupon of 8%, 15% and 10% per annum respectively and with a term of 10 years until maturity. Following the exercise of the put option Raven will hold the loan and preference share assets along with any cash balances.
Suspension of listings
Prior to this restructuring, the unaudited balance sheet of the company at 31 December 2021 had net assets equivalent to £437m, including the loans and share premium account noted above and unaudited net operating income for the year to 31 December 2021 equivalent to £108m.
The uncertainty around the impact of international sanctions and any Russian counter sanctions on the Russian economy make any estimate of the current NAV of the company or any assessment of their future income profile unfeasible.
De-listing of ordinary and preference shares
The board intends as soon as possible to send circulars to go to both ordinary shareholders and preference shareholders and to convene meetings to propose the required resolutions to cancel the London listings of both share classes. It will also look to cancel the secondary listings the company’s shares have on TISE, JSE and MOEX.
The directors have confirmed their support for the transaction and the de-listings and the company expects support from its major shareholders.
Richard Jewson, chairman said:
“In these extraordinary times it has become necessary to take extraordinary measures in order to protect all employees and stakeholders in our business. The combination of volatile markets and the continual risk of sanctions and counter sanctions necessitates this Transaction. We hope and pray for peace.”
RAV : Raven Property to de-list as Russian sanctions bite