VNL ZDP share issue

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN OR INTO AUSTRALIA, CANADA, JAPAN OR THE UNITED STATES OF AMERICA OR TO US PERSONS.

THIS DOCUMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE AN OFFER OR INVITATION TO PURCHASE OR ACQUIRE ANY TRANSFERABLE SECURITIES (AS DEFINED IN SCHEDULE 11A OF THE FINANCIAL SERVICES AND MARKETS ACT 2000), NOR SHALL IT FORM THE BASIS OF ANY CONTRACT FOR THE SALE OF ANY INTEREST IN A TRANSFERABLE SECURITY OR A SOLICITATION, INDUCEMENT, ADVICE OR RECOMMENDATION TO EFFECT ANY TRANSACTION OF ANY KIND WHATSOEVER. POTENTIAL INVESTORS SHOULD READ THE RELEVANT PROSPECTUS CAREFULLY BEFORE ANY INVESTMENT DECISION IS MADE.

VinaLand Limited

(“VNL”, or together with its subsidiaries, the “Group”)

6 December 2013

PROPOSED ISSUE OF UP TO £20 MILLION ZERO DIVIDEND PREFERENCE SHARES AT A PRICE OF 100 PENCE PER SHARE AND ANNOUNCEMENT CONCERNING A POSSIBLE TRANSACTION

ZDP Share Issue

VNL announces that its wholly owned subsidiary VinaLand ZDP Ltd (the "Issuer") has today published a prospectus to support the issue by the Issuer of up to 20 million zero dividend preference shares (“ZDP Shares”) at 100 pence per share by way of a placing (the “Placing”) and offer for subscription (the “Offer”) (together the “Issue”).  The ZDP Shares have a term of three years with the final capital entitlement being paid in 2016. A summary Issue timetable is set out below.

The gross redemption yield of the ZDP Shares (“GRY”) will be determined by way of a book-build reflecting orders received pursuant to the Issue.  Potential investors will be asked to indicate the number of ZDP Shares they wish to acquire via the Issue, at different gross redemption yields ranging from 7.0% to 8.0%.  The Issue orders will then be aggregated and the gross redemption yield set at a point where demand exceeds or equals the Gross Issue Proceeds (being the aggregate value of the ZDP Shares issued under the Issue at the Issue Price).

The Issuer will lend the Net Issue Proceeds to VNL pursuant to the terms of the Loan Agreement which will be used by VNL to assist in re-financing the Group's project level debt facilities as they mature across its development portfolio, to fund potential capital investments in its project companies (as necessary) and for general working capital purposes.

VNL has no leverage, but there is a modest amount of debt held at the individual project level on a non-recourse basis.  In total, the Group has debt of approximately 35.2 per cent. of NAV, of which 20.8 per cent. represents the Parent’s interest.  There currently exists an opportunity to refinance a significant portion of this project debt on improved terms using the proceeds of the Issue. In addition to this, the Issue will increase flexibility in financing and completion of some projects, contribute additional working capital and diversify funding sources.

Possible transaction

On 21 November 2012, Shareholders approved a change to the investment policy to put VNL into a cash return period where it will not make any investments, except where funds are required for existing projects.  VNL is now seeking to realise assets in its existing portfolio and continue with the development of selected projects to maximise value.

The VNL Board confirms that VinaCapital Investment Management Limited (the “Investment Manager”), with the approval of the Board, is in preliminary discussions which may or may not lead to an offer for some or all of the VNL’s ordinary shares, a disposal of some or all of VNL’s assets or a transaction with a similar effect.

The Board emphasises that the discussions are at any early stage and there can be no certainty that an offer or transaction will be made, nor as to the terms on which any offer or transaction might be made or take place.

A further announcement in this regard will be made if and when appropriate.

The Company's registered office is located in the Cayman Islands.  Accordingly, the Company is not subject to The City Code on Takeovers and Mergers.

Standby facility agreement

VNL has also today entered into a standby facility agreement with the Investment Manager under which the Investment Manager has agreed to make available a working capital facility of up to US$1.2 million plus the cumulative amount of management fees that the Investment Manager will have received from VNL in the period from 6 December 2013 to the date of drawdown which, in aggregate, will total approximately US$12.5 million.  There are no fees payable under the standby facility which is unsecured, carries an interest rate of 13% per annum and terminates on 15 June 2015. The standby facility is conditional on and has been entered into in order to facilitate the issue of the prospectus.

The Directors of VNL consider, having consulted with Grant Thornton UK LLP, VNL’s Nominated Adviser, that the terms of the transaction are fair and reasonable insofar as its shareholders are concerned.

Outline anticipated timetable

6th December 2013

Issue of prospectus and Issue commences

16th December 2013 at 6pm

Issue closes

17th December 2013

Announcement of results of the Issue

20th December 2013

ZDP Shares admitted to trading

 

Michel Casselman, Chairman of VNL, said: “I believe the issue of the ZDP Shares is in the best interests of shareholders as it provides the Group with additional flexibility to maximise the value of the current portfolio through the ongoing development, sales and divestment process.”

More information on VNL is available at www.vinacapital.com/vnl

Enquiries:

David Dropsey
VinaCapital Investment Management Limited
Investor Relations / Communications
+84 8 821 9930
david.dropsey@vinacapital.com
 
William Marle / Hiroshi Funaki
Edmond de Rothschild Securities,
Placing Agent, Financial Adviser & Broker
+44 (0)20 7845 5950 / 5960
funds@lcfr.co.uk

Philip Secrett
Grant Thornton UK LLP, Nominated Adviser
+44 (0)20 7383 5100
philip.j.secrett@uk.gt.com 
 
Andrew Walton
FTI Consulting, Public Relations (London)
+44 (0)20 7269 7204
andrew.walton@fticonsulting.com

Background to and benefits of the Issue

VNL has no leverage, but there is a modest amount of debt held at the individual project level on a non-recourse basis.  In total, the Group has debt of approximately 35.2 per cent. of NAV, of which 20.8 per cent. represents the Parent’s interest.  There currently exists an opportunity to refinance a significant portion of this project debt on improved terms using the proceeds of the Issue.  In addition to this, the Issue will increase flexibility in financing and completion of some projects, contribute additional working capital and diversify funding sources.

The Issuer will lend the Net Issue Proceeds to VNL which will be used by the VNL to assist in re-financing the Group's project level debt facilities as they mature across its development portfolio, to fund potential capital investments in its project companies (as necessary) and for general working capital purposes.

The Issue

The Issuer, a newly incorporated wholly owned subsidiary of VNL, is seeking to issue up to 20 million ZDP Shares by way of the Issue.  The issue price of the ZDP Shares will be 100 pence per share.  Application will be made to the UKLA and the London Stock Exchange for the ZDP Shares to be admitted to a standard listing on the Official List and to trade on the London Stock Exchange's main market for listed securities.

The holders of the ZDP Shares will be entitled to receive a capital sum at the end of the three year term (the “Final Repayment Date”).  The capital sum per ZDP Share will be 100 pence increased at an equivalent annual rate equal to the ZDP Share gross redemption yield from the date of issue, compounding daily.  The ZDP Shares will have no entitlement to any dividends or to participate in the revenue profits of the Group.

The gross redemption yield of the ZDP Shares will be determined by way of a book-build reflecting orders received pursuant to the Issue.  Potential investors will be asked to indicate the number of ZDP Shares they wish to acquire via the Issue, at different gross redemption yields ranging from 7.0% to 8.0%.  The Issue orders will then be aggregated and the gross redemption yield set at a point where demand exceeds or equals the Gross Issue Proceeds.

The ZDP Share gross redemption yield will impact the final capital entitlement, final net asset cover, final debt cover and hurdle rate of the ZDP Shares and therefore the table below outlines this information at gross redemption yields between 7.0 per cent, and 8.0 per cent.

Gross Redemption Yield

7.0%

7.1%

7.2%

7.3%

7.4%

7.5%

7.6%

7.7%

7.8%

7.9%

8.0%

Final Capital Entitlement

122.5p

122.8p

123.2p

123.5p

123.9p

124.2p

124.6p

124.9p

125.3p

125.6p

126.0p

Cover

11.88x

11.85x

11.81x

11.78x

11.75x

11.72x

11.68x

11.65x

11.62x

11.59x

11.55x

The illustrative statistics are calculated on the basis of the principal bases and assumptions set out in the appendix of this announcement.  The Cover illustration above assumes that 20 million ZDP Shares are issued.

Use of Proceeds

The Issuer will lend the Net Issue Proceeds to VNL pursuant to the terms of the Loan Agreement which will be used by VNL in the following order of priority (the utilisation amounts set out below are based on the assumption that Net Issue Proceeds of £20 million are raised pursuant to the Issue):

i)              approximately £9.5 million, to assist in re-financing the Group's project level debt facilities to obtain better terms and also to re-finance those facilities as they mature across its development portfolio;

ii)             approximately £5.5 million, to fund potential capital investments in its project companies (as necessary); and

iii)            approximately £4.1 million, for general working capital purposes.

Appendix

The statistics contained in this announcement relating to the ZDP Shares have been calculated on the following principal bases and assumptions, which are more fully set out in Part VIII of the prospectus:

This press release appears as a matter of record only and does not constitute an offer to sell or a solicitation of an offer to purchase any security.

Definitions used in this press release shall mean the same as in the prospectus published today unless the form and context imply otherwise.

The distribution of this announcement in certain jurisdictions may be restricted by law. No action has been taken by VNL, the Issuer or Edmond de Rothschild Securities (UK) Limited ("Edmond de Rothschild") that would permit an offering of the ZDP Shares or possession or distribution of this announcement or any other offering or publicity material relating to such shares in any jurisdiction where action for that purpose is required. Persons into whose possession this announcement comes are required by VNL, the Issuer and Edmond de Rothschild to inform themselves about, and to observe, such restrictions.

The information presented herein is not an offer for sale within the United States of any equity shares or other securities of VNL or the Issuer. Neither VNL nor the Issuer has been nor will it be registered under the US Investment Company Act of 1940, as amended (the "Investment Company Act"). In addition, the ZDP Shares have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act") or any other applicable law of the United States. Consequently, the ZDP Shares may not be offered or sold or otherwise transferred within the United States, or to, or for the account or benefit of, US Persons (as defined in Regulation S under the Securities Act), except pursuant to an exemption from the registration requirements of the Securities Act and under circumstances which will not require VNL or the Issuer to register under the Investment Company Act. No public offering of the ZDP Shares is being made in the United States. The ZDP Shares may only be resold or transferred in accordance with the restrictions set forth in the prospectus and related subscription documents. This communication should not be distributed, forwarded, transferred, reproduced, or otherwise transmitted, directly or indirectly, to any persons within the United States or to any US Persons unless it is lawful to do so.

This announcement is for information purposes only and does not constitute an invitation to subscribe for or otherwise acquire or dispose of securities in VNL or the Issuer in any jurisdiction.  The information contained in this announcement is for background purposes only and does not purport to be full or complete.  No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness, This announcement does not constitute or form part of any offer to issue or sell, or any solicitation of any offer to subscribe or purchase, any investments nor shall it (or the fact of its distribution) form the basis of, or be relied on in connection with, any contract therefor.

This document is not intended to constitute legal, tax or accounting advice or investment recommendations.  Prospective investors are advised to seek expert legal, financial, tax and other professional advice before making any investment decision. Statements contained in this announcement that are not historical facts are based on current expectations, estimates, projections, opinions and beliefs of VNL and the Issuer. Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon.  Additionally, this announcement contains "forward looking statements".  Actual events or results or the actual performance of VNL may differ materially from those reflected or contemplated in such targets or forward-looking statements.

Edmond de Rothschild Securities (UK) Limited is acting for VNL and the Issuer and no-one else in connection with the Issue and will not be responsible to anyone other than VNL and the Issuer for providing the protections afforded to customers of Edmond de Rothschild or for providing advice in relation to the Issue.