REG - abrdn Euro Logistics - Publication of Circular and Notice of GM

abrdn European Logistics IncomeAnnouncement

05/07/2024 11:15

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RNS Number : 3485V  abrdn European Logistics Income plc  05 July 2024

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE
A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION.

 

 

5 July
2024

 

For Immediate Release

 

abrdn European Logistics Income plc

 

Publication of Circular and Notice of General Meeting

 

Further to the announcement of 20 May 2024, the Board of abrdn European
Logistics Income plc (the "Company") announces that a circular (the
"Circular") to convene a general meeting (the "General Meeting") has been
published today and sent to shareholders ("Shareholders"), the purpose of
which is to propose the adoption of an amended investment policy in order to
implement a managed wind-down of the Company (the "Managed Wind-Down").

 

Under the proposed Managed Wind-Down process, the Company will be managed with
the intention of realising all the assets in its portfolio in an orderly
manner and with a view to repaying borrowings and making timely returns of
capital to Shareholders.

 

The adoption of the amended investment policy is conditional on Shareholder
approval by way of an ordinary resolution requiring the approval of a majority
of the Company's shares voted at the General Meeting (whether in person or by
proxy).

 

Additionally, in order to assist with the future process of distributing net
disposal proceeds from the sale of assets to Shareholders, the Company is
proposing a further special resolution at the General Meeting to cancel the
Company's current share premium account in order to create further
distributable reserves for the Company.

 

The Board unanimously recommends that Shareholders vote in favour of both
resolutions to be proposed at the General Meeting.

 

The Board and abrdn Fund Managers Limited ("abrdn", the "Manager") anticipate
that the realisation of the portfolio will be concluded over an 18-24 month
period, a timeframe driven by, amongst other things, the market environment.
The intention is that the net disposal proceeds will be used to balance the
repayment of debt and return of capital to Shareholders. On the basis of the
realisation profile of the portfolio anticipated by the Manager, the Company
is targeting the commencement of returning capital to Shareholders by the end
of 2024.

 

The Company will seek to return cash to Shareholders in an efficient and fair
manner that accounts for, among other things, the UK tax consequences for
Shareholders and the composition of the Company's Shareholder register.

 

Changes to the Investment Management Agreement

Conditional upon the adoption of the amended investment policy, the Board and
the Manager intend to amend the terms of the current investment management
agreement between the Company and the Manager (the "Investment Management
Agreement") to ensure, amongst other things, that the Manager's fee
arrangements are appropriately aligned with the objective of maximising the
value realised from the disposal of the Company's assets in a timely manner.

 

Details of the proposed changes to be made to the Investment Management
Agreement have been set out in the Appendix to this announcement and shall, if
Shareholders approve the adoption of the amended investment policy at the
General Meeting, be documented in an amendment to the Investment Management
Agreement, effective from 1 August 2024.

 

The proposed changes to the Investment Management Agreement fall within
Listing Rule 11.1.10R (smaller related party transactions) and the details set
out in this announcement are being notified in accordance with Listing Rule
11.1.10R(2)(c).

 

General Meeting

The General Meeting has been convened for 10.00 a.m. on Tuesday, 23 July 2024
to be held at the offices of abrdn plc, 18 Bishops Square, London, E1 6EG. The
expected timetable of principal events in relation to the General Meeting is
as follows:

 

Event
 
Time and Date

Publication of Circular
                          Friday 5 July 2024

Latest time and date for receipt of proxy appointments

and instructions for the General Meeting
        10.00 a.m. on Friday 19 July 2024

 

General Meeting
                            10.00 a.m. on Tuesday 23 July 2024

 

The Circular will be made available on the Company's website at
https://www.eurologisticsincome.co.uk/en-gb/literature. For the avoidance of
doubt, neither the contents of this website nor the contents of any websites
accessible from any hyperlinks are incorporated into or form part of this
announcement.

 

A copy of the Circular will also be submitted to the National Storage
Mechanism, where it will shortly be available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) .

 

Enquiries

abrdn Fund Managers Limited
          +44 (0) 20 7156 2382

Gary Jones

Ben
Heatley

 

Investec Bank
plc
                +44 (0) 20 7597 4000

David Yovichic

Denis Flanagan

 

FTI
Consulting
+44 (0) 20 3727 1000

Dido Laurimore

Richard Gotla

James McEwan

 

Investec Bank plc, which is authorised in the United Kingdom by the Prudential
Regulation Authority and regulated in the UK by the Financial Conduct
Authority and the Prudential Regulation Authority, is acting exclusively for
the Company and no one else in connection with the matters referred to in this
announcement and shall not be responsible to anyone other than the Company for
providing the protections afforded to clients of Investec, nor for providing
advice in connection with the matters referred to in this announcement.
Neither Investec nor any of its affiliates (nor any of its or their respective
directors, officers, employees, representatives or agents) owes or accepts any
duty, liability or responsibility whatsoever (whether direct, indirect,
consequential, whether in contract, in tort, under statute or otherwise) to
any person who is not a client of Investec in connection with the matters
referred to in this announcement.

 

This announcement is not intended to, and does not, constitute or form part of
any offer, invitation or the solicitation of an offer to purchase, otherwise
acquire, subscribe for, sell or otherwise dispose of, any securities whether
pursuant to this announcement or otherwise.

 

The distribution of this announcement in jurisdictions outside the United
Kingdom may be restricted by law and therefore persons into whose possession
this announcement comes should inform themselves about, and observe, such
restrictions. Any failure to comply with the restrictions may constitute a
violation of the securities law or any such jurisdiction.

 

Capitalised terms used in this announcement have the meanings given to them in
the Circular.

 

LEI Number

The Company's LEI Number is 213800I9IYIKKNRT3G50

 

Appendix

Proposed Changes to the Investment Management Agreement

 

The Board and the Manager have agreed to a material reduction in the
management fee (the "Management Fee") level and a reduction in the marketing
fee (the "Marketing Fee"), with the introduction of a new fee structure. This
new fee structure includes the reduced Management Fee, the reduced Marketing
Fee and the introduction of a disposal fee (the "Disposal Fee") and a
conditional disposal fee (the "Conditional Disposal Fee"), where fees will be
linked to the net realised value of asset sales after accounting for adviser
fees and any taxes payable, as described below.

 

In addition to the below, the Manager has agreed that the notice period under
the Investment Management Agreement will be reduced from twelve months down to
three months, with such notice not to be served before 31 March 2025. The
Board has also agreed a key person risk provision with the Manager to ensure
continuity of management services.

 

Subject to the adoption of the new investment policy, the Manager's current
fee arrangement will be replaced, effective from 1 August 2024, with the
following:

 

1) a Management Fee of 0.5 per cent. per annum of the IFRS NAV, calculated and
paid monthly in arrears until the Company's shares are delisted;

 

2) a Disposal Fee of 0.65 per cent. of net disposal proceeds realised per
asset (being the disposal proceeds received from the date of the General
Meeting, after the deduction of all disposal costs and all taxation payable).
To better align with Shareholder interests, such fees will be payable in two
instalments:

a) an initial payment once properties which represented at least 80 per cent.
of the Portfolio Value have been sold; and

b) a balancing payment once 100 per cent. of all properties have been sold.

 

3) A Conditional Disposal Fee payable on completion of the portfolio Managed
Wind-Down process consisting of:

i) 0.05 per cent. of aggregate net disposal proceeds if the aggregate gross
sales value achieved is equivalent to not less than 95 per cent. of the
Portfolio Value, or

ii) 0.1 per cent. of aggregate net disposal proceeds if the aggregate gross
sales value achieved is equivalent to not less than 100 per cent. of the
Portfolio Value.

 

4) A reduced annual Marketing Fee of £95,000 in relation to abrdn's investor
relations services and Shareholder communications (including management of the
Company website and other Shareholder literature).

 

For the purposes of the above, "Portfolio Value" means the valuation of the
portfolio as at 31 March 2024 (being the date of the most recent valuation of
the Company's portfolio).

 

The Manager is a related party to the Company and this change to the
Investment Management Agreement constitutes a smaller related party
transaction under Listing Rule 11.1.10R. For the purposes of Chapter 11 of the
Listing Rules, the combined fees receivable in sections 1 to 4 above will be
capped at 4.99 per cent. of the Company's IFRS NAV as at 31 March 2024. This
cap is a technical requirement under the Listing Rules and the Board expects
the aggregate fees to be substantially lower than the cap.

 

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