* The board of directors of Russian Real Estate Investment Company AB (publ)
("Ruric" or the "Company") has decided to propose an issue of new shares
amounting to approximately MSEK 170 with pre-emption right for the Company's
shareholders (the "Issue of New Shares"). The proposal of the Issue of New
Sharesis conditional upon a resolution by the extraordinary meeting of
shareholders, intended to be held on 5 May 2010.
* Each share in Ruric (regardless of series) gives the right to subscribe for
five (5) new shares of series B, for the subscription price of SEK 3 per
share, which means an issue of a maximum of approximately 56,8 million
shares of series B which provides the Company a maximum amount of
approximately MSEK 170.4 before deducting the issue expenses.
* There are underwriting commitments and guarantee undertakings for the
maximum amount of the Issue of New Shares.
* The major shareholders, Nils Nilsson[1] and E. Öhman J:or AB, holding
approximately 16.88 per cent of the share capital and approximately 41.01
per cent of the votes in the Company, have committed to vote in favor of the
necessary resolutions at the extraordinary meeting of shareholders and to
subscribe for their share in the Issue of New Shares.
* The board of directors has also resolved upon a set-off issue directed to
the of the Company's creditors that have accepted alternative no. 1 in the
composition offer that was subject for voting at the creditors meeting held
before the district court of Stockholm on Friday 26th of March. The
resolution is conditional upon the shareholder meetings' approval.
* The new shares shall be paid through set-off against a maximum of MSEK
215.8 of these creditors' claims against the Company, whereby each
subscribed share shall lead to set-off against a claim amount of SEK 6 (the
subscription price per share)
* Through the set-off issue, the Company's share capital will increase with a
maximum of approximately MSEK 71.9 and, through the issue of new shares,
with a maximum of approximately 36.0 million of shares of Series B.
* In addition to this, Ruric's board of directors have resolved to issue a new
bond to those of the Company's creditors that have accepted alternative no.
1 in the composition proposal, in the purpose of forming partly payment,
corresponding to 66.5 per cent of the outstanding amount for these
creditors, with the main conditions as set forth below.
[1] Nils Nilsson commitment concerns the amount of shares that he owned on 19
March 2010, but not to shares that he may come to acquire thereafter.
Background
Since the fall of 2008 the real estate and rental market in Saint Petersburg has
been characterised by a notable decrease in demand, which, in combination with
an increased supply of finished projects, have resulted in decreased rental
rates. The real estate prices also decreased towards the end of 2008 when the
insecurity of the future financial development increased in combination with a
sudden lack of liquidity and possibilities to receive financing through loan.
During the end of 2009 and the beginning of 2010 the outlook is, however,
brightened.
With the purpose to find a long term solution for the Company's financing,
discussions were initiated during the first half of 2009 with the larger bond
holders. A public offer was given to the Company's bond holders in October 2009
regarding prolongation/exchange of current bonds. The offer was recalled on 9
November 2009 since the necessary acceptance was not received and the Company's
board of directors at the same time decided to file a petition for company
reorganization before the district court of Stockholm.
On 11 February 2010 a composition offer was given to the Company's creditors
that subsequently was revised on 12 March 2010, mainly in accordance with what
is described below. The revised composition offer was approved by the necessary
majority at the creditors' meeting on 26 March 2010, with reservation for a
final reconciliation of the voting list against the Company's debt books for the
bond loans no. 2 and 3 and the district courts formal decision. A final voting
list will be established about 1 April 2010 based on debt books with record day
26 March 2010. The district courts' decision is expected to be announced around
6 April 2010.
It is the board of directors' opinion that Ruric, given the present Issue of New
Shares, the set-off issue, the issue of the new bonds together with the received
composition, has taken an important step to secure the long term financing
securing that the Company can maintain the underlying long term values that is
considered to be in the Company's assets and under arranged forms sell such
assets that is not considered to fall within the scope of the Company's strategy
and direction.
Composition
The total amount of claims comprised by the composition amounts to MSEK 1,026,
including accrued interest up to and including 31 May 2010. The composition
offer contained two alternatives for the creditors to choose between:
Alternative no 1 comprises partly of the issue of a new secured bond of 66.5 per
cent of the total outstanding amount, partly of a set-off issue of 28.5 per cent
of the total outstanding amount and accrued interest until 30 April 2010 for a
subscription rate of SEK 6 per share, and partly a cash payment corresponding to
the remaining 5 per cent of the total outstanding amount.
Alternative no 2 is a plain cash alternative - a 55 per cent composition.
At the creditors meeting held on 26 March 2010, 77 per cent of the creditors
were present and 84 per cent of the claims were represented. The composition
offer was approved by all present creditors. Creditors holding about 75 per cent
of the total claims have chosen to accept alternative no. 1. Creditors that have
not voted and chosen an alternative will automatically be considered to have
chosen alternative no. 2.
The decision is estimated to gain legal force around 27 April 2010 and
accounting and payment of the dividend from the composition will begin after the
Issue of New Shares has been carried out which is estimated to take place in the
beginning of June 2010.
Conditions for the new bond
The new secured bond has a term of approximately 4,5 years with maturity date
16 November 2014 and produces, after the first 140 days which are free of
interest, an annual interest of 10 per cent, to be paid in cash, or, if the
Company so chooses, an interest of a total of 13 per cent per year, whereof 3
percentage points will be paid in cash and the remaining 10 percentage points
will be paid in the form of new bonds. The loan amounts initially to MSEK 509.
If the Company at a later stage exercises its right to pay interest in the form
of new bonds, the loan may amount to a maximum of MSEK 678.
Conditions for the set-off issue
The of the board of directors decided upon set-off issue directed to some of the
Company's creditors which have accepted alternative no. 1 in the composition
offer means that a maximum of 35,970,057 new shares of series B may be issued
through set-off against a part of their claims against the Company of SEK
215,820,343, whereby each subscribed share shall lead to a set-off of against a
claim of SEK 6 (subscription price per share). The reason to deviate from the
shareholders pre-emption right is that the Company seeks to repay a part of the
Company's debt to the creditors through the set-off issue in accordance with the
conditions for the composition offer alternative no 1. The board of directors'
resolution is conditional upon the shareholder meetings' approval.
Issue of New Shares with pre-emption right for the Company's shareholders
Ruric's board of directors has in the light of the above decided to propose that
the extraordinary shareholders' meeting in the Company resolves to carry out the
Issue of New Shares amounting to approximately MSEK 170, before deducting
expenses related to the Issue of New Shares. The Issue of New Shares is intended
to finance the proposed composition offer and, for the rest, to strengthen the
Company's solidity and liquidity.
Conditions for the Issue of New Shares
The proposed Issue of New Shares gives Ruric's existing shareholders a right to,
for each share in Ruric(regardless of series) subscribe for five (5) new shares
of series B. The subscription price will be SEK 3 per share, which means that
the Issue of New Shares will provide Ruric with a maximum of SEK 170,446,440,
before deducting the issue expenses, through the issuance of a maximum of
56,815,480 new shares of series B.
Underwriting commitments and guarantee undertakings
Underwriting commitments from the major shareholders Nils Nilsson and E. Öhman
J:or AB and a guarantee undertaking from a guarantee syndicate composed of Öhman
Fondkommission AB corresponding to the maximum amount of the issue exist. The
issue agreements include customary terms and conditions for this kind of
transaction, and that the composition becomes valid and that the Company is not
in insolvent liquidation.
Number of shares, share capital etc
Today the Company has 11,363,096 outstanding shares, whereof 1,330,266 shares in
series A and 10,032,830 shares in series B. Through the proposed issues of new
shares (issue with pre-emption right for the shareholders and set-off issue), a
maximum of 92,785,573 additional shares of series B will be added in the
Company. In connection with the issues of new shares, the board of directors
also suggests necessary changes of the articles of association regarding the
limits for the share capital and the number of shares. The issues of new shares
leads to the Company's share capital increasing at the most with approximately
MSEK 185.5. The equity capital may increase with a total amount of approximately
MSEK 386.
Extraordinary shareholders meeting
Resolutions to carry out the Issue of New Shares and the set-off issue and all
other necessary resolutions referring to the transaction are intended to be
adopted at an extraordinary shareholders' meeting to be held in Ruric on 5 May
2010. The board of directors' resolution and the resolutions of the
extraordinary shareholders' meeting are and will also be conditioned by the
composition gaining legal force.
Notice convening the extraordinary shareholders meeting will be published
through a separate press release.
Preliminary time schedule
Around 27 April 2010 The composition decision gains legal force
5 May 2010 Extraordinary shareholders' meeting
7 May 2010 Last day of trade with the share inclusive the right
to participate in the Issue of New Shares
10 May 2010 First day of trade with the share exclusive of the
right to participate in the Issue of New Shares
10 May 2010 Prospectus in view of the Issue of New Shares is
published
12 May 2010 Record day for participation in the Issue of New
Shares
17 May 2010-
25 May 2010 Trade with subscription rights
17 May 2010-
28 May 2010 Subscription period
Beginning of June 2010 Swedish Companies Registration Office registers the
Issue of New Shares and subscription payment will be
available for the Company
First half of June 2010 Payment of the composition dividend is estimated
Other
HQ Bank is financial counsel and Grönberg Advokatbyrå is legal counsel for Ruric
in connection with the Issue of New Shares.
Russian Real Estate Investment Company AB (publ)
For further information
Craig Anderson, CEO
Phone +7 812 703 35 50 (St. Petersburg)
Phone +46 8 509 00 100 (Stockholm)
e-mail craig@ruric.com
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Web www.ruric.com
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ABOUT RURIC
Ruric's business concept is to acquire, develop, manage, lease out and divest
real estate assets in St. Petersburg,Russia, offering top-quality commercial
premises in the best locations, thus contributing to the successful business
performance of its tenants. The company's vision is to become a leading real
estate company in central St. Petersburg.
The company's strategy is to identify high-potential real estate in the city
centre of St. Petersburg, structure appropriate deals and acquire at best price.
Thereafter top‑notch commercial space is offered to tenants seeking the best
possible premises and that are willing to pay for such premises.
Ruric's Certified Advisor on First North is Erik Penser Bankaktiebolag
[HUG#1400139]
Ruric proposes a cash issue of new shares, with pre-emption right for the shareholders, and resolves on a set-off issue of new shares, directed to certain creditors.
| Source: Russian Real Estate Inv. Company AB
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