REG-abrdn Property Income Trust Limited: Proposed Sale

abrdn Property Income TrustAnnouncement

27/09/2024 07:00

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 SUCH JURISDICTION

FOR IMMEDIATE RELEASE

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

27 September 2024

abrdn Property Income Trust Limited
(an authorised closed-ended investment company incorporated in Guernsey with
registration number 41352)
LEI Number: 549300HHFBWZRKC7RW84

PROPOSED SALE 
(the “Transaction”)

abrdn Property Income Trust Limited (“API” or the “Company”) is
pleased to announce that it has entered into an agreement with certain funds
and accounts managed by GoldenTree Asset Management LP (“GoldenTree”) for
the sale of the entire share capital of abrdn Property Holdings Limited
(“APH”), a wholly-owned subsidiary of API.

The Transaction comprises the sale of 39 assets (the “Portfolio”), being
the Company’s entire investment property portfolio, with the exception of
its interest in the land at Far Ralia. API’s debt facility with RBSI will be
transferred in full to GoldenTree. The cash consideration for the purchase of
the Portfolio is £351m (the “Consideration”),  and the Company will
receive net proceeds after adjusting for debt and other net assets of APH and
subject to normal adjustments including those arising from the completion
process.  

GoldenTree has paid a cash deposit of £35.1m, with the balance of the
Consideration being payable in cash on completion.

The Consideration:
* represents a discount of 8.0 per cent. to API’s external valuation of the
Portfolio as at 30 June 2024 of £381.6 million 1  (#_ftn1); and
* implies a pro-forma net asset value of API as at 30 June 2024 of £244
million, equivalent to 64.0 pence per share, after adjusting for costs of the
Transaction (the “Estimated Net Asset Value per Share”). 2  (#_ftn2)
The Estimated Net Asset Value per Share represents:
* a discount of 12.7 per cent. to API’s net asset value per API Share of
73.3 pence as at 30 June 2024;
* a premium of 6.66 per cent. to the API Share price of 60 pence as at 26
September 2024, being the closing API Share price immediately prior to the
date of this announcement; and
* a premium of 20.1 per cent. to the API Share price of 53.3 pence on 28 May
2024, being the date that API Shareholders approved the Managed Wind-Down.
It is intended that, following completion, returns of capital will be made to
API Shareholders in cash from the Consideration, by way of a members'
voluntary liquidation.

Such returns will be subject to the net realisation value of Far Ralia, which
API is actively marketing, adjustments arising from the completion process,
the operational costs of managing API through to liquidation (including tax
effects) and the liquidation costs. 

Background to and reasons for the Transaction

On 28 May 2024, API Shareholders approved an amendment to the Company's
investment policy to implement a Managed Wind-Down.

Under the Managed Wind-Down process, API was to be managed with the intention
of realising all of the assets in its portfolio in an orderly manner, via
disposals of single assets, groups of assets or the portfolio as a whole, with
a view to repaying borrowings and making returns of capital to API
Shareholders whilst aiming to obtain the best achievable value for API’s
assets at the time of their realisations.

The Transaction follows an extensive and competitive process undertaken by API
and its advisers to identify a buyer for the Portfolio in an effort to balance
the objectives of maximising returns for shareholders against the timeframe
for disposals.

The API Board, having considered the potential alternatives including an
asset-by-asset disposal, believes that the Transaction represents an effective
execution of the Managed Wind-Down process.  It provides greater price
certainty and quicker return of proceeds for API Shareholders through
realising the substantial majority of the investment portfolio in a single
transaction.

The Transaction is being undertaken in accordance with the Company’s Managed
Wind-Down investment policy and does not require the approval of API
Shareholders.

It is expected that the Company will declare the Q3 dividend of 1 penny per
API Share in line with previous guidance, to be paid before distribution of
sale proceeds.

Conditions and timetable
* Completion of the Transaction is anticipated to take place on 29 November
2024.
* It is intended that subject to receipt of consent from the Scottish Forestry
Commission, Far Ralia will be transferred from APH to API prior to completion.
Provisions have been made to complete on the sale in the event of a delay by
Scottish Forestry, whilst protecting the interest of API. The Transaction is
also subject to clearance under the UK National Security and Investment Act
2021.
* It is expected that following completion of the Transaction and at an
appropriate point in time, API will seek API Shareholders' approval to appoint
a liquidator to wind up the Company and to cancel the Company's admission to
trading on the Main Market of the London Stock Exchange. Trading in API Shares
will no longer be possible from that time.
* From the point that the conditions to the Transaction are satisfied, API
will not continue to fulfil the relevant conditions to qualify for UK REIT
status.
* The intention is to commence the returns of capital to shareholders as soon
as the liquidator can do so.
Information on GoldenTree and Farran Investments

GoldenTree
* GoldenTree is an employee-owned, global asset management firm that
specialises in opportunities across the credit universe in sectors such as
high yield bonds, leveraged loans, private credit, distressed debt, structured
credit, emerging markets, real estate, private equity and credit-themed
equities.
* GoldenTree was founded in 2000 by Steve Tananbaum and is one of the largest
independent global credit asset managers. GoldenTree manages nearly $55
billion for institutional investors including leading public and corporate
pensions, endowments, foundations, insurance companies and sovereign wealth
funds.
* GoldenTree has over 300 employees, with offices in New York, West Palm
Beach, Charlotte, Newport Beach, Dallas, London, Dublin, Munich, Singapore,
Sydney, Tokyo and Dubai.
Farran Investments
* Farran Investments is a privately-owned commercial real estate specialist,
whose team have acquired, funded, managed and exited over £5 billion of
commercial real estate assets.
* Farran Investments, who act as an advisor to GoldenTree, is a minority
co-investor in the acquisition vehicle incorporated by GoldenTree and will
become the asset manager to the Portfolio following completion of the
Transaction.
James Clifton-Brown, Chair of API said:

“Since the shareholder vote on 28 May 2024 to put the Company into a Managed
Wind Down was passed, the Board, alongside the Investment Manager, explored
the most effective means of disposing of the Company’s assets. The aims were
to maximise the returns to shareholders but also to return cash to them as
soon as possible. The full range of disposal strategies was considered from
individual property sales to a wider transaction. Through an independent
agent, Gerald Eve, the whole portfolio was marketed to potential buyers in an
extensive and competitive process.

Following a second round of bids, the Board considered the GoldenTree Asset
Management bid provided the best solution for shareholders, compared with the
net present value of what might be achieved by way of individual sales over a
longer period and represents a swift implementation of the shareholder
resolution to conduct a Managed Wind Down. I would like to thank the team at
abrdn who have delivered this outcome for shareholders.” 

Enquiries

abrdn Property Income Trust                          
James Clifton-Brown (Chair)
                                         
via Winterflood
Jason Baggaley (Fund
Manager)                                   
+44 7801 039 463
Mark Blyth (Deputy Fund Manager)
                                +44 7703 695
490          

Winterflood (Corporate Broker to API)
Neil
Langford                                                                
+44 20 3100 0160        

Farran Investments
Freddie Brooks 
(Partner)                                  
            info@farraninvestments.com
Simon Lee 
(Partner)                                        

Important notices

Winterflood Securities Limited ("Winterflood"), which is authorised and
regulated by the Financial Conduct Authority in the United Kingdom, is acting
exclusively for API and no-one else in connection with the matters set out in
this document and will not be responsible to anyone other than API for
providing the protections afforded to customers of Winterflood or for
providing advice in relation to the matters set out in this document. Neither
Winterflood nor any of its affiliates owes or accepts any duty, liability or
responsibility whatsoever (whether direct or indirect, whether in contract, in
tort, under statute or otherwise) to any person who is not a client of
Winterflood in connection with this document, any statement contained herein
or otherwise.


 1  (#_ftnref1) Excluding assets disposed of between 1 July 2024 and the date
of this announcement, and the interest in the land at Far Ralia

 2  (#_ftnref2) Including API's external valuation of Far Ralia which as at 30
June 2024 was £10m.



Copyright (c) 2024 PR Newswire Association,LLC. All Rights Reserved