REG - Blackstone Loan Fin - Circular and Notice of General Meetings
04/12/2024 16:45
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20241204:nRSD8530Oa&default-theme=true
RNS Number : 8530O Blackstone Loan Financing Limited 04 December 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.
4 December 2024
Blackstone Loan Financing Limited
("BGLF" or the "Company")
Publication of Circular and Notice of General Meetings
As announced by the Board on 21 November 2024, the Company has entered into a
conditional agreement for the sale of 100 per cent. of the Profit
Participating Notes ("PPNs") issued by Blackstone Corporate Funding DAC
("BCF") and held by Blackstone / GSO Loan Financing (Luxembourg) S.à.r.l.
("LuxCo"), a wholly-owned subsidiary of the Company, to Blackstone Corporate
Funding II S.à.r.l. (the "Purchaser"), an acquisition vehicle directly
and/or indirectly owned by vehicles managed and/or advised by Blackstone
Alternative Credit Advisors LP or an affiliate thereof (the "Proposed
Transaction").
The Proposed Transaction, which is subject to Shareholder approval and certain
other conditions, would result in a significant acceleration and fulfilment of
the Company's existing Managed Wind-down process and generate gross cash
proceeds of approximately €304 million for the Company on completion.
Shortly following completion of the Proposed Transaction, the Company will,
subject to Shareholder approval at the Second EGM, effect the Summary
Winding-up of the Company under the Companies (Jersey) Law 1991 (the "Summary
Winding-up" and together with the Proposed Transaction, the "Proposals") and
intends to distribute a substantial portion of its remaining net assets
(including all, or the vast majority, of the net proceeds of the Proposed
Transaction) in the form of a further third compulsory redemption of Shares as
soon as practicable thereafter (the "Third Redemption").
A circular (the "Circular") has today been published setting out details of,
and to seek Shareholder approval for, the Proposals and explain why the Board
is recommending that all Shareholders vote in favour of: (i) the Ordinary
Resolution of the Shareholders approving the Proposed Transaction at the First
EGM (the "First EGM Resolution"); and (ii) the Special Resolution approving
the Summary Winding-up at the Second EGM (the "Second EGM Resolution" and
together with the First EGM Resolution, the "Resolutions"). The formal Notices
of the EGMs, containing the full text of the Resolutions, are set out in the
Circular.
The above summary should be read in conjunction with the full text of this
announcement and the Circular, extracts of which are set out in Appendix I
below. Please refer to Appendix I to this announcement which sets out further
details of the Proposed Transaction, as extracted from the Circular.
Unless otherwise states, capitalised terms in this announcement have the
meanings ascribed to them in Appendix II to this announcement and in the
Circular.
Expected Timetable of Events
Publication of the Circular 4 December 2024
Payment of Q3 2024 Dividend 6 December 2024
Latest time and date for receipt of Proxy Appointments for the First EGM 11.00 a.m. on 17 December 2024
Record date for participation and voting at the First EGM 5.00 p.m. on 17 December 2024
First EGM 11.00 a.m. on 19 December 2024
Announcement of result of the First EGM 19 December 2024
Payment date of Second Redemption 19 December 2024
Anticipated completion date of Proposed Transaction 31 December 2024
Latest time and date for receipt of Proxy Appointments for the Second EGM* 11.00 a.m. on 13 January 2025
Record date for participation and voting at the Second EGM* 5.00 p.m. on 13 January 2025
Suspension of the listing of the Shares on the Official List and of trading of 7.00 a.m. on 15 January 2025
the Shares on the Main Market*
Second EGM* 11.00 a.m. on 15 January 2025
Announcement of result of the Second EGM* 15 January 2025
Commencement of the Summary Winding-up (conditional on approval of the Second 15 January 2025
EGM Resolution)*
Record date for Third Redemption* 5.00 p.m. on 15 January 2025
Cancellation of the listing of the Shares on the Official List and 8.00 a.m. on 16 January 2025
cancellation of admission to trading of the Shares on the Main Market*
Payment date of Third Redemption* ** Expected to be by 4 February 2025 or as soon as possible thereafter
* Events subject to postponement in the event of a delay in completion of the
Proposed Transaction and/or in the receipt by the Company of any requisite
regulatory consents.
** The Company will make a Redemption Announcement through an RIS in advance
of the Third Redemption confirming exact details of the timing and amount of
the redemption payment to be made to Shareholders.
Each of the times and dates in the expected timetable of events may be
extended or brought forward without notice. If any of the above times and/or
dates change, the revised time(s) and/or date(s) will be notified to
Shareholders by an announcement through an RIS provider. All references are to
London time unless otherwise stated.
Enquiries:
BGLF Via Singer Capital Markets
Steven Wilderspin (Chair)
Singer Capital Markets (Financial Adviser & Joint Corporate Broker to the 020 7496 3000
Company)
James Maxwell / Alaina Wong / Oliver Platts (Corporate Finance)
Alan Geeves / Sam Greatrex (Sales)
BNP Paribas (Company Secretary to the Company) 01534 709189 / 709108
APPENDIX I
Recommended Proposed Sale of Profit Participating Notes
Recommended Proposal for Summary Winding-up of the Company
Notice of Extraordinary General Meetings
1. INTRODUCTION
As announced by the Board on 21 November 2024, the Company has entered into a
conditional agreement for the sale of 100 per cent. of the Profit
Participating Notes ("PPNs") issued by Blackstone Corporate Funding DAC
("BCF") and held by Blackstone / GSO Loan Financing (Luxembourg) S.à.r.l.
("LuxCo"), a wholly owned subsidiary of the Company, to Blackstone Corporate
Funding II S.à.r.l. (the "Purchaser"), an acquisition vehicle directly and/or
indirectly owned by vehicles managed and/or advised by Blackstone Alternative
Credit Advisors LP or an affiliate thereof (the "Proposed Transaction").
The Proposed Transaction, which is subject to Shareholder approval and certain
other conditions, would result in a significant acceleration and fulfilment of
the Company's existing Managed Wind-down process and generate gross cash
proceeds of approximately €304 million for the Company on completion. 1
Shortly following completion of the Proposed Transaction, the Company will,
subject to Shareholder approval at the Second EGM, effect the Summary
Winding-up of the Company under the Companies (Jersey) Law 1991 (the "Summary
Winding-up" and together with the Proposed Transaction, the "Proposals") and
intends to distribute a substantial portion of its remaining net assets
(including all, or the vast majority, of the net proceeds of the Proposed
Transaction) in the form of a further third compulsory redemption of Shares as
soon as practicable thereafter (the "Third Redemption").
Further details relating to the Proposals outlined above are set out in
sections 2 to 8 below.
The purpose of the Circular is to set out details of, and seek your approval
for, the Proposals and explain why the Board is recommending that all
Shareholders vote in favour of: (i) the Ordinary Resolution of the
Shareholders approving the Proposed Transaction at the First EGM (the "First
EGM Resolution"); and (ii) the Special Resolution approving the Summary
Winding-up at the Second EGM (the "Second EGM Resolution" and together with
the First EGM Resolution, the "Resolutions"). The formal Notices of the EGMs,
containing the full text of the Resolutions, are set out in Part II of the
Circular.
2. THE PROPOSALS
2.1 Proposed Transaction
Background to and reasons for the Proposed Transaction
On 15 September 2023, 99 per cent. of voting Shareholders approved the change
in the Company's Investment Objective and Policy to implement a managed
wind-down of the Company (the "Managed Wind-down"). The Managed Wind-down is
being implemented by returning to Shareholders in an orderly manner the net
proceeds from the realisation of the Company's investment in BCF, through
which the Company obtains its investment exposure.
As at the date of the Circular, the Company has distributed approximately
€23 million to Shareholders by way a compulsory partial redemption of Shares
in June 2024 and has announced that a further approximately €61 million will
be distributed on or around 19 December 2024. Shareholders have, in addition,
received dividend distributions since the Managed Wind-down of €50.9 million
(inclusive of the Q3 2024 Dividend declared on 21 October 2024). As outlined
in the latest Q3 2024 investor report (published on the Company's website),
the Company's indicative forward-looking CLO portfolio cashflow profile
illustrates that the Company's pro rata share of the underlying CLO portfolio
held by BCF is not expected to be fully redeemed until 2030. The existing
modelling projects that c. 58 per cent. of remaining cashflows will not be
returned until 2027 or later, and c. 26 per cent. will not be returned until
2029 or later.
Since the vote for the Managed Wind-down, a number of Shareholders have asked
the Board about the prospects for an acceleration of the wind-down process.
Given that the majority of the underlying CLO investments must be retained by
BCF until redemption or final maturity in accordance with risk retention rules
for CLO securitisations, the two main viable opportunities for an acceleration
would have been an offer for the entire issued share capital of the Company or
the sale of the PPNs issued by BCF and held by LuxCo, which was a potential
wind-down option contemplated in the circular posted to Shareholders in
respect of the Managed Wind-down. It is worth noting that ownership of the
PPNs does not give a purchaser the right to sell a CLO position or direct its
redemption as the CLO portfolio is wound down. Consequently, this
significantly limits how attractive the acquisition of the Company's PPNs
would be to a third-party buyer. As at 30 September 2024, LuxCo owned a
minority portion of approximately 35 per cent. by value of the PPNs issued by
BCF.
The Company's Portfolio Adviser is Blackstone Ireland Limited, part of the
Blackstone Credit and Insurance business ("BXCI") of Blackstone Inc.
("Blackstone"). Given BXCI's expertise in the CLO marketplace, its familiarity
with the wider BGLF structure and its strong investor relationships, the Board
considered BXCI to be a credible potential acquirer of the Company or the
PPNs, should a sale transaction be considered by the Board.
The Board had therefore prepared, without Blackstone's involvement, for the
possibility of Blackstone emerging as a purchaser of the Company or PPNs,
which included establishing additional key principles and processes for
dealing with any potential conflict of interest and identifying a suite of
advisors independent of Blackstone, such as the use of an independent CLO
valuation expert for any potential offer. Despite not being strictly required
in the circumstances, the Board insisted on the holding of a voluntary
Shareholder vote on any proposal. The Board also made clear to BXCI during the
course of negotiations that it would expect Blackstone-affiliated Shareholders
to abstain from voting the Shares that they hold in the Company.
As announced by the Company on 21 November 2024, BXCI initially approached the
Board with a proposal. As explained in more detail below, after a series of
detailed negotiations and deliberations, during which the Purchaser twice
agreed to increase its offer price, the Board determined the offer to be in
the best interests of Shareholders.
Details of the Proposed Transaction
Under the terms of the Proposed Transaction, the total cash consideration to
be paid by the Purchaser for the acquisition of 100 per cent. of the Company's
PPNs is €303,974,504.41 (the "PPN Purchase Value"), minus any payment made
in respect of any redemptions or distributions from BCF to LuxCo in respect of
the PPNs ("PPN Distributions") between 30 September 2024 and the closing date
for the Proposed Transaction. Such PPN Distributions will simultaneously: (i)
decrease the PPN Purchase Value by the Euro amount of the PPN Distributions;
and (ii) increase the other net assets of the Company by an equivalent
offsetting amount. Accordingly, after accounting for other net assets of the
Company and other planned Shareholder distributions already announced, the
cumulative proceeds delivered to the Company are expected to remain unchanged.
As set out in Figure 1 below, the Company has received PPN Distributions of
approximately €42.7 million since 30 September 2024 (and does not expect to
receive further PPN Distributions between the date of the Circular and
completion of the Proposed Transaction). Consequently, in accordance with the
terms agreed with the Purchaser, the PPN Purchase Value to be received by the
Company through the Proposed Transaction will be reduced by approximately
€42.7 million to approximately €261.3 million.
As announced by the Company on 8 November 2024, the Company intends to return
approximately €61.0 million to Shareholders on or around 19 December 2024 by
way of a compulsory partial redemption of Shares (the "Second Redemption"),
which will be funded by the recent PPN Distributions in combination with the
Company's existing cash resources. The Company also confirms that it will
proceed with the Second Redemption irrespective of completion of the Proposed
Transaction.
Inclusive of the planned distribution of other net assets of the Company (in
part, via the Q3 2024 Dividend (to be paid on 6 December 2024) and the Second
Redemption), the Proposed Transaction represents total value to Shareholders
of approximately €338 million (as illustrated in Figure 1 below). In total,
with 417,959,768 Shares in issue as at 21 November 2024 (being the date of the
announcement of the Proposed Transaction), this represents:
· €0.808 per Share, as illustrated in Figure 1 below;
· a premium of 15.8 per cent. to the three-month volume weighted
average price of €0.6984 per Share and a premium of 7.8 per cent. to the
closing price of €0.7500 per Share(2) as at 20 November 2024;
· a premium of 30.4 per cent. to volume-weighted average price
since the Board's approval of the Managed Wind-down in September 2023; and
· a discount of 9.9 per cent. to the Company's latest mark to model
NAV of €0.8970 per Share as at 31 October 2024 (or a discount of 12.1 per
cent. when including the dividend of €0.0225 per Share, which went "ex" on
31 October 2024) and a discount of 4.3 per cent. to the Company's latest mark
to market NAV of €0.8451 per Share as at 30 September 2024.
Figure 1: Total estimated value to Shareholders of the Proposed Transaction
based on issued share capital of 417,959,768 Shares as at 31 October 2024
Q3 2024 Dividend (to be paid on 6 December 2024) 9.4
Proceeds (per Share) from Q3 2024 Dividend(1,2) €0.0225
Second Redemption 61.0
Proceeds (per Share) from Second Redemption(1,3) €0.146
PPN Purchase Value (prior to PPN Distributions) 304.0
Less: PPN Distributions received from LuxCo since 30 September 2024 (42.7)
PPN Purchase Value (post PPN Distributions) 261.3
Plus: estimated other net assets of BGLF(4) 33.9
Plus: PPN Distributions received since 30 September 2024 42.7
Total estimated value to Shareholders before Q3 2024 Dividend and Second 337.9
Redemption
Less: Second Redemption (61.0)
Less: Q3 2024 Dividend (9.4)
Total estimated value to Shareholders after Q3 2024 Dividend and Second 267.5
Redemption
Implied pro forma estimated value to Shareholders (per Share) from Proposed €0.640
Transaction(1,6,)(7)
Combined pro forma estimated value to Shareholders (per Share) (1,5,6) €0.808
Notes:
1. Based on 417,959,768 Shares in issue as at 31 October 2024.
2. Q3 2024 Dividend declared 21 October 2024, with 31 October 2024 "ex" date
and payment date of 6 December 2024.
3. Second Redemption announced 8 November 2024, with 2 December 2024 "ex" date
and payment date on or around 19 December 2024.
4. Estimated other net assets of the Company represents net assets that are
outside of the PPNs, including undistributed cash, feeder-level cash, other
receivables and other payables at the Company, before transaction and the
Company's dissolution costs.
5. Combined pro forma estimated value (per Share) to Shareholders from the Q3
2024 Dividend, the Second Redemption and the Proposed Transaction.
6. Stated before transaction costs of €0.0064/Share and costs associated
with the dissolution of the Company.
7. Please note the following paragraph which explains how this pro forma
number is affected by the change in share capital following the Second
Redemption.
As noted in the 21 November 2024 announcement, the total value to Shareholders
of €337.9 million corresponds to a value of €0.808 per Share at the then
current Share count of 417,959,768 Shares. This value includes the proceeds of
the Second Redemption of €61 million and the Q3 2024 Dividend of €9.4
million to be paid on 6 December 2024. As the Second Redemption of €61
million is delivered, however, it will reduce the Share count from 417,959,768
to 349,955,289, resulting in a different presentation of the same Euro-value
figures on a per Share basis.
Specifically, the total estimated value to Shareholders after the Q3 2024
Dividend and the Second Redemption of €267.5 million (€337.9 million less
€61.0 million less €9.4 million) will be divided over a smaller Share
count. While the total value of €337.9 million remains unchanged, and
€0.808 per Share will have been delivered on the basis of 417,959,768
Shares, at completion the €267.5 million of total estimated value to
Shareholders after the Q3 2024 Dividend and the Second Redemption will be
divided over 349,955,289 remaining Shares, corresponding to €0.764 per Share
on that basis.
Based on 349,955,289 Shares in issue as at the date of the Circular, taking
into account the net proceeds received from the Proposed Transaction and the
Summary Winding-up, and after deducting the estimated costs of the Proposed
Transaction, costs associated with the dissolution of the Company and other
known liabilities, Shareholders are estimated to receive approximately
€0.755 per Share as a result of the Proposals if both Resolutions are
approved at the EGMs. This is equal to the aforementioned €0.764 per Share,
less costs of approximately €0.009 per Share.
The distribution of the Third Redemption, which is expected to comprise a
substantial portion of its remaining net assets (including all, or the vast
majority, of the net proceeds of the Proposed Transaction), is anticipated to
take place on or around 4 February 2025 2 . The Company will publish further
announcement(s) with details of the Third Redemption to be made to
Shareholders in due course if the Proposed Transaction is approved by
Shareholders and completes.
For the Summary Winding-up, the Company will retain an appropriate amount of
cash with which to settle all of its remaining affairs and liabilities prior
to any final cash being returned to Shareholders and the Company being
dissolved. Further details relating to the Summary Winding-up are set out in
section 2.2 below.
Costs of the Proposed Transaction
The costs of implementing the Proposed Transaction are not expected to exceed
approximately €2.6 million in total.
Such costs include additional one-off remuneration for the Directors to
reflect the additional work involved in connection with the Proposed
Transaction of £84,000 in aggregate (equal to approximately four-and-a-half
months' worth of the fees payable to Directors in the ordinary course of
business each year).
Valuation
The Company publishes a NAV per Share on a monthly basis in accordance with
its prospectus. This published NAV is based upon the valuation of the BCF
portfolio using a CLO intrinsic calculation methodology as set out in the
prospectus, which is referred to as a 'mark to model' approach. This does not
include 'market colour' (market clearing levels, market fundamentals, bids
wanted in competition ('BWIC'), broker quotes or other indications).
On a quarterly basis, the valuation of BCF's portfolio is also carried out at
fair value using models that incorporate market colour at the relevant date,
referred to as a 'mark to market' approach. This approach complies with
International Financial Reporting Standards (IFRS) and is used for annual and
semi-annual financial reporting purposes.
Both mark to model and mark to market approaches are valid reference points
for the Proposed Transaction. However, the Board focused on the mark to market
approach as the best indication of fair value for a willing seller and willing
buyer of CLO equity in the market as at 30 September 2024.
In valuing its portfolio on both the mark to model and mark to market basis,
BCF uses the services of an independent CLO valuation specialist (the
"Original Valuer"). However, the Original Valuer is engaged by BCF and not the
Company and has an ongoing business relationship with Blackstone. The Board
therefore engaged another independent service provider to provide CLO
valuation advice (the "Transaction Valuer") for the purposes of the Proposed
Transaction. The Board is aware that the Transaction Valuer is engaged on an
ongoing basis to value the portfolio of one of the Company's peers.
In the view of the Transaction Valuer, the mark to market valuation of BCF's
CLOs by the Original Valuer (as included in the mark to market NAV per Share
of €0.8451) is within the range that a reasonable market participant would
have assigned to the equity as at 30 September 2024. The assumptions and
methodologies used by the Original Valuer are generally accepted market inputs
and calculation methods. However, in the Transaction Valuer's opinion, the CLO
prices used by the Original Valuer were, generally, above the prices that the
Transaction Valuer would have used. The Transaction Valuer's own mid prices
more closely align to the value to Shareholders of €0.8080 resulting from
the Proposed Transaction than to the published mark to market NAV per Share of
€0.8451 as at 30 September 2024. Shareholders should note that the valuation
of CLO equity is highly subjective and reliant on sophisticated modelling and
numerous assumptions, and that this value difference is within a reasonable
range.
Directors' assessment of the Proposed Transaction
In considering whether to accept the offer from BXCI and put the Proposed
Transaction forward to a Shareholder vote, the Board weighed three options:
(i) accepting the offer; (ii) continuing the Managed Wind-down of the Company
in the manner set out in the Company's circular to Shareholders dated 25
August 2023; and (iii) commencing a more public formal sales process for the
PPNs or the Company.
Having consulted with its advisers other than the Portfolio Adviser, the Board
considered that a more public sales process would be unlikely to achieve a
better outcome for Shareholders in the circumstances, as this could extend the
timeline whilst incurring additional fixed costs and could result in no
credible offers from non-Blackstone-affiliated parties and/or risk the offer
from BXCI being withdrawn. The main asset of the Company is the PPNs (rather
than the underlying CLOs), which give indirect exposure to the underlying
portfolio and are therefore not as tradeable or marketable as the CLO
securities themselves. BXCI and the Company's brokers have also consistently
sought investor interest in the Shares and the Company since the Company's
initial public offering with limited success.
The Board therefore felt that its decision was between the Proposed
Transaction and the continuing Managed Wind-down and, in fact, the cashflow
profile of the continuing Managed Wind-down was the best 'competition' when
considering the offer from BXCI 3 . Given the conclusion of the valuation
assessment was that the offer represented a fair market value, the two options
were finely balanced. Of course, any individual investor may favour one option
over the other if they take a different view to the market on risk 4 . In the
Board's view, however, there were also other factors to consider:
· Shareholders voted for an orderly wind-down in September 2023.
Since then, a number of Shareholders have expressed the desire for an
accelerated return of capital. The Proposed Transaction significantly
accelerates and fulfils the Managed Wind-down process.
· As the Managed Wind-down progresses towards maturity there is a
likelihood that the quantum of future cashflows and therefore the NAV of the
Company will become increasingly volatile and more difficult to realise at the
prevailing valuation. Such tail risk may result from holding a residual
portfolio of CLOs for which a call has not been possible due to the valuation
of the underlying loan portfolio. The Proposed Transaction insulates
Shareholders from any such tail risk.
· The costs of running the Company until 2030 are significant.
These are estimated at €1.2 million per year (totalling €7.4 million for
2025 to 2030) with limited scope for reduction as the size of the Company
reduces given the nature of the Company's activities. This equates to
€0.0178 per Share compared to estimated transaction costs of €0.0064 per
Share for the Proposed Transaction based on the issued share capital of
417,959,768 Shares as at 31 October 2024.
· As the Managed Wind-down progresses, the market capitalisation of
the Company will fall and the liquidity in the Shares is likely to fall.
· Blackstone's knowledge of the portfolio allows for a quick
transaction process with minimal additional due diligence compared to a third
party unrelated to the Portfolio Adviser and certainty of execution.
· The Company has not received any indicative offer or approach for
the Company or the PPNs besides that of the Proposed Transaction since the
Managed Wind-down commenced.
After a series of detailed negotiations and deliberations, during which the
Purchaser twice agreed to increase its offer price, the Board determined the
Proposed Transaction to be the most effective and valuable offer available to
Shareholders, providing acceleration of value realisation for Shareholders via
a cash exit at a premium to the Company's historic Share prices.
The Board has also consulted with certain of the Company's major Shareholders
on the Proposed Transaction. These Shareholders (together with the Directors'
own holdings), who represented approximately 28 per cent. of voting rights
(not including Blackstone-affiliated shareholders) in the Company as at 21
November 2024, have indicated their support for the Proposed Transaction.
Taking into consideration the reasons outlined above, amongst other points,
the Board has concluded that the Proposed Transaction represents the best
practicable means of maximising Shareholder value on an expedited basis in the
present circumstances.
Information on the Purchaser
The Purchaser is a newly formed acquisition vehicle directly and/or indirectly
owned by vehicles managed and/or advised by Blackstone Alternative Credit
Advisors LP ("BACA") or an affiliate thereof. BACA is an affiliate of
Blackstone, a global investment and advisory firm that was founded in 1985.
Through its different investment businesses, as of 30 September 2024,
Blackstone has total assets under management of approximately US$1.1 trillion,
including approximately US$345 billion in corporate private equity,
approximately US$325 billion in real estate funds, approximately US$83 billion
in multi-asset investing and approximately US$355 billion in credit‐oriented
and insurance strategies. Blackstone's asset management businesses include
global investment strategies focused on real estate, private equity,
infrastructure, life sciences, growth equity, credit & insurance, real
assets, secondaries and hedge funds.
Key terms of the Sale and Purchase Agreement
Parties and Structure
The Sale and Purchase Agreement was entered into on 21 November 2024 between
the Company, LuxCo (together with the Company, the "Seller Parties") and the
Purchaser. Pursuant to the terms of the Sale and Purchase Agreement, the
Purchaser has conditionally agreed to purchase 100 per cent. of the PPNs from
LuxCo for cash.
Timing and conditions to completion
Completion of the Proposed Transaction under the Sale and Purchase Agreement
is expected to occur on 31 December 2024, subject to the Purchaser's right to
extend the completion date for up to 20 Business Days (as defined in the Sale
and Purchase Agreement) after 31 December 2024, and is conditional upon
satisfaction (or waiver, where applicable) of the following conditions (the
"Conditions"):
· the passing of the First EGM Resolution at the First EGM; and
· no event of default under the LuxCo PPNIPA having occurred and
not having been waived or cured.
Purchase price
The purchase price for the PPNs payable on completion of the Proposed
Transaction under the Sale and Purchase Agreement shall be the PPN Purchase
Value of €303,974,504.41, minus an amount equal to the aggregate of any PPN
Distributions, as notified by the Seller Parties to the Purchaser. For further
details, please see the section headed "Details of the Proposed Transaction"
above.
Warranties
The parties to the Sale and Purchase Agreement have given warranties which are
customary for a transaction of this nature. These include, amongst other
things, warranties in respect of their capacity to enter into and perform the
Sale and Purchase Agreement, regulatory matters, insolvency and (in the case
of the Seller Parties) title to the PPNs.
Termination
Either Seller Party or the Purchaser may terminate the Sale and Purchase
Agreement with immediate effect at any time after the First EGM if the First
EGM Resolution is not passed, or if a Condition has not been fulfilled (or
waived, where applicable) by 3.00 p.m. on the Long Stop Date.
Governing Law
The Sale and Purchase Agreement is governed by English law. The courts of
England and Wales have exclusive jurisdiction in relation to all disputes
arising out of, or in connection with, the Sale and Purchase Agreement.
Shareholder approval
Implementation of the Proposed Transaction is conditional on its approval by
Shareholders at the First EGM, which will be held on 19 December 2024 at 11.00
a.m. Further details of the First EGM and the First EGM Resolution are set out
in section 3 below. Shareholders (together with the Directors' own holdings)
who represented approximately 28 per cent. of voting rights (excluding
Blackstone-affiliated shareholders) in the Company as at 21 November 2024 have
indicated their support for the Proposed Transaction.
Although the Proposed Transaction does not constitute a related party
transaction for the purposes of the UK Listing Rules, the Board's view is
that, in the interests of good governance, any proposal for the sale of the
entirety of the Company's assets to Blackstone-affiliated entities should be
subject to a Shareholder vote on a voluntary basis (by way of Ordinary
Resolution). As is customary in such situations, the Company has procured that
Blackstone-affiliated shareholders will abstain from voting on the Resolution
to approve the Proposed Transaction.
The sale of the Company's PPNs falls within the scope of the Company's
existing Investment Objective and Policy to effect an orderly realisation of
its assets, following the approval by Shareholders of the Managed Wind-down on
15 September 2023.
For the avoidance of doubt, the Proposed Transaction does not contemplate an
acquisition of or offer for the Company's shares, and so is not subject to the
UK Takeover Code.
Publication of NAV
If the Proposed Transaction is approved by Shareholders at the First EGM, the
Company will cease to publish its monthly NAV (including the 30 November 2024
NAV, which would ordinarily be published on or around the date of the First
EGM).
In the event that the Proposed Transaction is not approved, the Company will
continue to publish its NAV on a monthly basis in accordance with its current
practice.
2.2 Summary Winding-up and Third Redemption
Following the Second EGM, subject to Shareholder approval of the Second EGM
Resolution, the Company will commence the Summary Winding-up process in
accordance with the provisions of Chapter 2 (Summary winding up) of Part 21
(Winding up of companies) of the Companies Law, delist from trading on the
London Stock Exchange and cease to be regulated as a collective investment
fund under the Funds Law (subject to the approval of the JFSC).
Shortly thereafter, the Company intends to distribute a substantial portion of
its remaining net assets (including all, or the vast majority, of the net
proceeds of the Proposed Transaction) pursuant to the Third Redemption, which
is expected to take place on or around 4 February 2025 5 (#_ftn5) .
The Summary Winding-up will further entail the disposal of any remaining
assets of the Company, the settlement of all the remaining liabilities of the
Company and the return of any net remaining surplus cash to Shareholders
(after deduction of all applicable costs and expenses). The Company will
retain an appropriate amount of cash with which to settle all of its remaining
affairs and liabilities prior to any final cash being returned to Shareholders
and the Company being dissolved. If, however, the amount payable to any
Shareholder upon such final distribution is less than €5.00, it shall not be
paid to such Shareholder but instead shall be paid to the Nominated Charity.
Implementation of the Summary Winding-up is conditional on:
· approval of the Proposed Transaction by Shareholders at the First
EGM; and
· approval of the Summary Winding-up by Shareholders at the Second
EGM, which will be held on 15 January 2025 at 11.00 a.m.
Further details of the Second EGM and the Second EGM Resolution are set out in
section 3 below.
Based on 349,955,289 Shares in issue as at the date of the Circular, taking
into account the net proceeds received from the Proposed Transaction and the
Summary Winding-up, and after deducting the estimated costs of the Proposed
Transaction, costs associated with the dissolution of the Company and other
known liabilities, Shareholders are estimated to receive approximately
€0.755 per Share as a result of the Proposals if both Resolutions are
approved at the EGMs. Please see the section headed "Details of the Proposed
Transaction" above for further detail.
The Company will publish further announcements with details of the Third
Redemption to be made to Shareholders in due course if the Proposed
Transaction is approved by Shareholders and completes.
Costs of the Summary Winding-up
The costs of implementing the Summary Winding-up are not expected to exceed
approximately €0.3 million in total (the "Summary Winding-up Costs").
The Directors have agreed to a 50 per cent. reduction in their fees, which
will be effective from the date of approval of the Second EGM Resolution and
for the duration of the Summary Winding-up.
The proceeds from the Proposed Transaction will be held by the Company in Euro
from completion and will earn interest. Such interest is not included in the
above calculations but may mitigate a large portion of the Summary Winding-up
Costs.
2.3 Certain risks associated with the Proposals
In considering your decision as a Shareholder in relation to the Proposals,
you are referred to the risks set out below.
You should read the Circular carefully and in its entirety and, if you are in
any doubt about the contents of the Circular or the action you should take,
you are recommended to seek immediately your own personal financial advice
from your stockbroker, bank manager, solicitor, accountant or other
independent financial adviser authorised under the UK Financial Services and
Markets Act 2000 or, if you are in a territory outside the United Kingdom,
from an appropriately authorised independent financial adviser.
Only those risks which are material and currently known to the Board have been
disclosed below. It is possible that additional risks and uncertainties not
currently known to the Board, or that the Board currently deems to be
immaterial, may also have an adverse effect on the Company.
Risks relating to the Proposed Transaction
· Completion of the Proposed Transaction is conditional upon the
satisfaction or waiver (as applicable) of the Conditions on or before the Long
Stop Date, after which either the Seller Parties or the Purchaser may
terminate the Sale and Purchase Agreement. Whilst the Seller Parties and the
Purchaser have obligations in relation to the satisfaction of these
Conditions, there can be no assurance that the Conditions will be satisfied or
waived (to the extent they are capable of being waived). Further, there can be
no assurance that the satisfaction of these Conditions will not be delayed due
to factors outside the control of the Seller Parties and/or the Purchaser. If
the Proposed Transaction does not proceed to completion, the Company will not
receive the net proceeds from the sale of the PPNs. Additionally, any delay in
completing the Proposed Transaction may result in the accrual of additional
costs for the Company.
· As a listed company, the Company is exposed to potential
approaches from third parties seeking to instigate a public takeover of the
Company which might delay or prevent completion of the Proposed Transaction.
The Company might also be approached by a third party seeking to make a more
favourable offer than that of the Purchaser for the PPNs and the Directors
might consequently be required to consider that offer in accordance with their
fiduciary duties owed to the Company. The Sale and Purchase Agreement contains
certain provisions which limit the action the Seller Parties can take in
connection with any proposed alternative transaction, including the Company's
ability to solicit or initiate offers or expressions of interest from any
third party in connection with or with a view to agreeing or implementing any
such transaction. If the Company were to terminate the Sale and Purchase
Agreement other than in accordance with its terms, or were to otherwise breach
the terms of the Sale and Purchase Agreement (for example, by not convening
the First EGM to approve the Proposed Transaction), the Company may be found
liable to pay damages to the Purchaser in respect of the loss it has suffered
as a result of such termination or breach. Alternatively, at a court's
discretion, the Company may be ordered to perform its obligations under the
Sale and Purchase Agreement if such performance remained possible. There can
be no certainty as to the amount of any damages that the Company may be
required to pay, although such damages typically seek to provide redress to a
party as if the breached contract had been properly performed.
· Whilst the Board believes it has appropriate arrangements in
place to manage the expected costs and expenses in relation to the Proposed
Transaction, including post-completion costs, there can be no assurance that
the costs and expenses will not exceed the amounts currently estimated. There
may also be further additional and unforeseen expenses incurred in connection
with the Proposed Transaction either due to delays or otherwise. Such costs
and expenses may adversely affect the net proceeds from the Proposed
Transaction that the Company expects to have at or following completion, or
(if approved by Shareholders at the Second EGM) upon commencement of the
Summary Winding-up of the Company.
· The Proposed Transaction involves the direct sale by the Company
of the PPNs to the Purchaser, an acquisition vehicle directly and/or
indirectly owned by vehicles managed and/or advised by Blackstone or an
affiliate thereof. Further, Blackstone and/or its affiliates (including: (a)
investment vehicles managed and/or advised by Blackstone and/or its
affiliates; and/or (b) a Blackstone affiliate indirectly capitalised by
Blackstone) will directly and/or indirectly capitalise the Purchaser in part
or in full. Accordingly, there are numerous conflicts of interest inherent in
a transaction of this nature. It is not possible to describe or fully mitigate
all conflicts of interest and the Circular does not purport to do so; however,
Shareholders should note in particular the following:
o The Company and LuxCo are each advised or managed by an affiliate of
Blackstone, and the Purchaser (and/or the direct and/or indirect equity
holders thereof) is capitalised and/or advised by an affiliate of Blackstone.
This creates a misalignment between the interests of the Company and
Shareholders on the one hand and the Purchaser on the other, who are each
incentivised to maximise the value of the Proposed Transaction for their own
benefit.
o The purchase price which has been agreed between the Seller Parties and
the Purchaser in respect of the Proposed Transaction may not represent the
maximum value that Shareholders could receive for the PPNs, either by the
Company continuing to hold the PPNs until the end of the Managed Wind-down or
by transferring the PPNs to another buyer now or in the future.
o The Company and the Purchaser respectively have access to different
information which may be relevant to the Proposed Transaction.
The Board has taken various steps to mitigate such conflicts, including taking
independent advice, obtaining valuation advice from an independent valuer and
putting the Proposed Transaction to a Shareholder vote (from which
Blackstone-affiliated Shareholders will abstain), as described elsewhere in
the Circular.
· Neither Blackstone nor the Purchaser, nor any of their respective
affiliates, or their or their affiliates' respective shareholders, members,
partners, officers, employees or consultants (other than the Company), shall
be responsible in any way for any of the contents of the Circular (including
the fairness, accuracy, completeness, currentness, reliability or
reasonableness hereof) and accordingly none of the foregoing shall have any
liability in respect of the Circular.
Risks relating to the Summary Winding-up
· Any distributions made in the course of the Summary Winding-up
will be solely at the discretion of the Board and subject to ensuring the
Company's ongoing ability to settle its remaining liabilities as they fall
due.
· The amounts which may be owing to the creditors of the Company,
or which the Board may choose to retain in respect of current and future,
actual and contingent liabilities of the Company, and any unascertained
liabilities, and the costs and expenses of the liquidation are uncertain and
may affect the amount and timing of distributions to Shareholders.
· If the Second EGM Resolution is not passed, the Company will
continue in its current form, as a Jersey Listed Fund whose Shares are listed
and admitted to trading on the Main Market, until such time as other proposals
can be put forward to Shareholders; and, during any such period, the Company
would be required to bear proportionally greater ongoing costs and expenses
relative to its remaining assets.
3. EXTRAORDINARY GENERAL MEETINGS
As noted above, the Proposals are conditional, amongst other things, upon
Shareholders' approval of the Resolutions to be proposed at the First EGM and
the Second EGM.
Both EGMs will be held at the offices of BNP Paribas S.A. Jersey Branch, IFC
1, The Esplanade, St Helier, Jersey JE1 4BP.
The Notices of the EGMs, including the full text of the Resolutions, are set
out in Part II the Circular.
The quorum for each EGM is two Shareholders who, being entitled to vote, are
present in person or proxy. If within twenty minutes (or such longer time as
the Chair decides to wait) after the time appointed for the relevant EGM a
quorum is not present, the meeting shall stand adjourned for five Business
Days at the same time and place or to such other day and at such other time
and place as the Board may determine and no notice of adjournment need be
given. On the resumption of an adjourned meeting, those Shareholders who,
being entitled to vote, are present in person or proxy shall constitute the
quorum.
3.1 First EGM
The First EGM will be held on 19 December 2024 at 11.00 a.m.
The Resolution to be considered at the First EGM (the "First EGM Resolution")
is an Ordinary Resolution and will, if passed, approve the terms of, and
authorise the Directors to implement, the Proposed Transaction. The First EGM
Resolution is not conditional on the Second EGM Resolution.
Subject to the following paragraph, to become effective, the First EGM
Resolution must be approved by a simple majority of the votes cast by
Shareholders who, being entitled to vote, are present in person or by proxy at
the First EGM.
Blackstone-affiliated Shareholders have agreed to abstain from voting on the
First EGM Resolution and the Board will only consider the First EGM Resolution
to have been validly passed in the event that a majority of independent (i.e,
non-Blackstone-affiliated) Shareholders vote in favour of such Resolution.
3.2 Second EGM
The Second EGM will be held on 15 January 2025 at 11.00 a.m. In the event that
the First EGM Resolution is not passed by Shareholders, the Second EGM will be
adjourned indefinitely.
The Resolution to be considered at the Second EGM (the "Second EGM
Resolution") is a Special Resolution and will, if passed, approve the Summary
Winding-up of the Company in accordance with the provisions of the Companies
Law.
To become effective, the Second EGM Resolution must be approved by a
two-thirds majority of the votes cast by Shareholders who, being entitled to
vote, are present in person or by proxy at the Second EGM.
4. DOCUMENTS AVAILABLE FOR INSPECTION
Copies of the following documents will be available for inspection at the
offices of Herbert Smith Freehills LLP, Exchange House, Primrose Street,
London EC2A 2EG and at the registered office of the Company during normal
business hours on any Business Day from the date of the Circular until the
conclusion of the Second EGM (or, in the event that the First EGM Resolution
is not passed by Shareholders, the First EGM) and at the place of each
Extraordinary General Meeting for at least 15 minutes prior to, and during,
the relevant meeting:
· the Memorandum of Association of the Company and the Articles;
and
· the Circular.
Copies of these documents are also available free of charge at the Company's
registered office.
A copy of the Circular has been submitted to the National Storage Mechanism
and will shortly be available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) . The Circular will
also be available on the Company's website:
www.blackstone.com/fund/bglfln-blackstone-loan-financing-limited
(http://www.blackstone.com/fund/bglfln-blackstone-loan-financing-limited) .
5. TAXATION
The following comments are intended only as a general guide to certain aspects
of current UK tax law and HM Revenue & Customs' published practice, both
of which are subject to change possibly with retrospective effect. They are of
a general nature and do not constitute tax advice and apply only to
Shareholders who are resident in the UK (except where indicated) and who hold
their Shares beneficially as an investment. They do not address the position
of certain classes of Shareholders such as dealers in securities, insurance
companies or collective investment schemes. The information below does not
constitute legal or tax advice to any Shareholder. If you are in any doubt
about your tax position, or if you may be subject to tax in a jurisdiction
other than the United Kingdom, you should consult your independent
professional adviser.
(1) Tax residency of the Company
The Board has been advised that following certain changes to the United
Kingdom tax rules regarding "alternative investment funds" implemented by the
Finance Act 2014 and contained in section 363A of the Taxation (International
and other Provisions) Act 2010, the Company should not be resident in the
United Kingdom for United Kingdom tax purposes and it is the intention of the
Board to continue to conduct the affairs of the Company so that it does not
carry on any trade in the United Kingdom for taxation purposes.
(2) Taxation of chargeable gains
(a) Offshore Fund Rules
The treatment described below is based on any gain arising on a disposal of a
Shareholder's Shares not being taxed as income under the "offshore fund" rules
which apply for the purposes of UK tax legislation. Under current law, if the
Company (or any class of shares) were to be treated for UK taxation purposes
as an "offshore fund", gains on disposals of shares realised by a Shareholder
would be taxable as income and not as capital gains.
(b) Individual Shareholders
Subject to the comments in the next paragraph, any Shareholder who is an
individual and UK tax resident may, depending on that Shareholder's personal
circumstances, be subject to capital gains tax in respect of any gain arising
on a redemption of their Shares (or on a distribution in the final liquidation
of the Company).
For such individuals, capital gains are taxed at a rate of 18 per cent (for
basic rate taxpayers) or 24 per cent (for higher or additional rate
taxpayers). Individuals may, depending on their personal circumstances,
benefit from certain reliefs and allowances (including an annual exemption
from capital gains which is £3,000 for the tax year 2024-2025). Shareholders
who are not resident in the UK for taxation purposes will not normally be
liable to UK taxation on chargeable gains arising from the disposal of their
Shares unless those Shares are held for the purposes of a trade, profession or
vocation through a UK branch, agency, or permanent establishment, although
they may be subject to foreign taxation depending on their own particular
circumstances. Individual Shareholders who are temporarily not resident in the
UK for tax purposes may be liable to capital gains tax under anti-avoidance
legislation.
(c) Corporate Shareholders
For Shareholders who are UK resident companies, the redemption of Shares may
be treated as giving rise to both an income distribution and a capital
disposal. The extent to which the proceeds are treated as an income
distribution will depend (amongst other things) on the amount initially
subscribed for the redeemed Shares by the original subscriber and may be
affected by certain subsequent transactions.
Shareholders within the charge to UK corporation tax which are "small
companies" (for the purposes of UK taxation of distributions) should expect to
be subject to tax on any distribution deemed to arise on the redemption of
Shares. Other Shareholders within the charge to UK corporation tax will not be
subject to tax on any such distribution so long as the distribution falls
within an exempt category and certain conditions are met. In general, a
distribution to a UK corporate Shareholder who holds beneficially less than 10
per cent of the Company's issued share capital (or any class of that share
capital) should fall within an exempt category. However, the exemptions are
not comprehensive and are subject to anti-avoidance rules. If the conditions
for exemption are not or cease to be satisfied, or such a Shareholder elects
for an otherwise exempt distribution to be taxable, the Shareholder will be
subject to UK corporation tax on any distribution deemed to arise on
redemption of the Shares.
Based on the existing practice of HM Revenue & Customs, the part of the
proceeds that is not treated as an income distribution should be treated as
consideration for a disposal of the Shares for a Shareholder within the charge
to UK corporation tax. This may, depending upon the Shareholder's
circumstances and subject to any available exemption or relief, give rise to a
chargeable gain or an allowable loss for the purposes of UK corporation tax.
Shareholders within the charge to corporation tax should be subject to
corporation tax on chargeable gains on any chargeable gain arising on any
distribution in the final liquidation of the Company. The main rate of UK
corporation tax is 25 per cent.
(3) Taxation of dividends
(a) Individual Shareholders
Dividends received by any UK tax resident individual Shareholder in respect of
their Shares will be subject to UK income tax. To the extent dividends
received (in aggregate) in any given tax year fall within the dividend
allowance, they will be exempt from UK income tax. The dividend allowance for
the tax year 2024-2025 is £500.
To the extent dividends received (in aggregate) in any given tax year exceed
the dividend allowance, they will be subject to UK income tax. The applicable
rates of income tax for the tax year 2024-25 are:
· 8.75 per cent for basic rate taxpayers;
· 33.75 per cent for higher rate taxpayers; and
· 39.35 per cent for additional rate taxpayers.
In determining whether and, if so, to what extent dividend income falls above
or below the threshold for the higher rate of income tax or, as the case may
be, the additional rate of income tax, the Shareholder's total taxable
dividend income for the tax year in question (including the part falling
within the dividend allowance) will be treated as the highest part of the
Shareholder's total income for income tax purposes. In addition, dividends
within the dividend allowance which would otherwise have fallen within the
basic or higher rate bands will use up those bands respectively and so will be
taken into account in determining whether the threshold for higher rate or
additional rate income tax is exceeded.
(b) Corporate Shareholders
Shareholders within the charge to UK corporation tax (other than those which
are "small companies" for the purposes of UK taxation of dividends) will not
generally be subject to UK corporation tax on dividends paid on the Shares so
long as the dividends fall within an exempt category and certain other
conditions are met. In general, dividends paid to a UK corporate Shareholder
who holds beneficially less than 10 per cent of the Company's issued share
capital (or any class of that share capital) should fall within an exempt
category. However, the exemptions are not comprehensive and are subject to
anti-avoidance rules. If the conditions for exemption are not or cease to be
satisfied, or such a Shareholder elects for otherwise exempt dividends to be
taxable, the Shareholder will be subject to UK corporation tax on dividends
paid on the Shares. Shareholders are advised to consult their independent
professional tax advisers to determine whether such dividends will be subject
to UK corporation tax. The main rate of UK corporation tax is 25 per cent.
6. CONSEQUENCES OF THE PROPOSALS NOT BEING APPROVED
In the event that the First EGM Resolution is not passed by Shareholders, the
Proposed Transaction will not be implemented and the Second EGM will be
adjourned indefinitely. In such circumstances, the Company will proceed with
the Managed Wind-down in the manner set out in its circular to Shareholders
dated 25 August 2023.
In the event that the First EGM Resolution is passed but the Second EGM
Resolution is not passed by Shareholders, the Proposed Transaction will
proceed but the Company will not be summarily wound up under the Companies Law
and it will continue in its current form (as a Jersey Listed Fund whose Shares
are listed and admitted to trading on the Main Market) until alternative
proposals can be put forward to the Shareholders.
7. ACTION TO BE TAKEN BY SHAREHOLDERS
Whether or not you intend to be present at either or both EGMs, you are
requested to return a Proxy Appointment in respect of each EGM by one of the
following methods: (i) in hard copy form by post, by courier or by hand to
Link Group, PXS 1, Central Square, 29 Wellington Street, Leeds, LS1 4DL; (ii)
via the Registrar's app LinkVote+ which can be downloaded on the Apple App
Store or Google Play; (iii) online via Signal Shares (please refer to the
Notes of the Notices of Extraordinary General Meeting for further
information); or (iv) in the case of CREST members, by utilising the CREST
electronic Proxy Appointment service, in each case so as to be received by
Link Group as soon as possible and, in any event, not less than 48 hours
before the time at which the relevant EGM (or any adjournment thereof) is to
begin. In calculating such 48 hour period, no account shall be taken of any
part of a day that is not a Business Day
The completion and return of a Proxy Appointment will not preclude you from
attending the relevant EGM and voting in person if you wish to do so.
Each Shareholder is requested to consider and vote on the Resolutions, in
person or by proxy, at or before the relevant EGM. The First EGM will be held
on 19 December 2024 at 11.00 a.m. and the Second EGM will be held on 15
January 2025 at 11.00 a.m. Both EGMs will be held at the offices of BNP
Paribas S.A. Jersey Branch, IFC 1, The Esplanade, St Helier, Jersey JE1 4BP.
The full text of the Resolutions is set out in the Notices of the
Extraordinary General Meetings contained in Part II of the Circular.
8. RECOMMENDATION
The Board, which has been so advised by Singer Capital Markets, acting in its
capacity as the Company's financial adviser, considers that the Proposals are
fair and reasonable so far as the Shareholders of the Company are concerned.
In providing its advice, Singer Capital Markets has taken into account the
Board's commercial assessment of the Proposals and the views of certain large
Shareholders. The Board considers that the Proposals are in the best interests
of the Company and its Shareholders as a whole.
The Board recommends that all Shareholders (other than, in the case of the
First EGM Resolution, Blackstone-affiliated Shareholders) vote in favour of
the Resolutions, as the Directors intend to do in respect of their own
beneficial holdings of Shares, including Shares held by persons closely
associated with them, which, in aggregate, amount to 625,755 Shares,
representing approximately 0.2 per cent of the total voting rights in the
Company.
Yours faithfully
Steven Wilderspin
Chair
APPENDIX II
DEFINITIONS
"Articles" the articles of association of the Company in force from time to time
"BACA" Blackstone Alternative Credit Advisors LP
"BCF" Blackstone Corporate Funding DAC
"Blackstone" Blackstone Inc.
"Board" or "Directors" the board of directors of the Company whose names are set out on page 5 of the
Circular
"Business Day" any day (other than a Saturday or a Sunday) on which banks are open for
general business in London and Jersey
"BXCI" Blackstone Credit and Insurance
"Chair" the chair of the Board
"CLO" collateralised loan obligation
"Companies Law" the Companies (Jersey) Law 1991
"Company" Blackstone Loan Financing Limited
"Conditions" the conditions to completion of the Proposed Transaction, as set out in
section 2.1 of Part I of the Circular
"CREST" the system for paperless settlement of trades and the holding of
uncertificated securities administered by Euroclear
"EGMs" the First EGM and the Second EGM
"Euroclear" Euroclear UK & International Limited
"FCA" the Financial Conduct Authority of the United Kingdom
"First EGM" the extraordinary general meeting of the Company convened for 11.00 a.m. on 19
December 2024 at the offices of BNP Paribas S.A. Jersey Branch, IFC 1, The
Esplanade, St Helier, Jersey JE1 4BP (or any adjournment thereof), notice of
which is set out at the end of the Circular
"First EGM Resolution" the Ordinary Resolution to be proposed at the First EGM in relation to the
Proposed Transaction
"FSMA" the UK Financial Services and Markets Act 2000, as amended
"Funds Law" the Collective Investment Funds (Jersey) Law 1988
"HMRC" HM Revenue & Customs
"Investment Objective and Policy" the investment objective and policy of the Company, as set out in the
Company's annual report dated 26 April 2024, details of which can also be
found on the Company's website,
https://www.blackstone.com/fund/bglfln-blackstone-loan-financing-limited/
"IVC" has the meaning given on page 1 of the Circular
"Jersey Listed Fund" a "listed fund" regulated by the JFSC under the Funds Law and the Jersey
Listed Fund Guide published by the JFSC
"JFSC" the Jersey Financial Services Commission
"London Stock Exchange" or "LSE" London Stock Exchange plc
"Long Stop Date" 31 December 2024 (or such other date as may be agreed in writing between the
Seller Parties and the Purchaser)
"LuxCo" Blackstone / GSO Loan Financing (Luxembourg) S.à r.l., a wholly owned
subsidiary of the Company
"LuxCo PPNIPA" the profit participating note issuing and purchase agreement dated 1 July 2014
(as amended and restated from time to time) between, amongst others, BCF, the
Company and LuxCo
"Main Market" the Main Market of the London Stock Exchange
"Managed Wind-down" has the meaning given in section 2.1 of Part I of the Circular
"NAV" or "Net Asset Value" the value of the assets of the Company less its liabilities, as published by
the Company
"Nominated Charity" St Mungo's Homeless Charity
"Notices" the notices of the EGMs included in Part II of the Circular.
"Official List" the list maintained by the FCA pursuant to Part VI of FSMA
"Ordinary Resolution" a resolution which requires a simple majority of the Shareholders who, being
entitled to vote, are present in person or by proxy and entitled to vote and
voting at the appropriate meeting
"Portfolio Adviser" Blackstone Ireland Limited
"PPN Distributions" has the meaning given in section 2.1 of Part I of the Circular
"PPN Purchase Value" has the meaning given in section 2.1 of Part I of the Circular
"PPNs" profit participating notes issued by BCF to LuxCo pursuant to the LuxCo PPNIPA
"Proposals" has the meaning given in section 1 of Part I of the Circular
"Proposed Transaction" the proposed sale of 100 per cent. of the PPNs to the Purchaser pursuant to
the Sale and Purchase Agreement
"Proposed Transaction Costs" has the meaning given in section 2.1 of Part I of the Circular
"Proxy Appointment" the appointment of a proxy on behalf of a Shareholder in accordance with the
procedures described in the Circular
"Purchaser" Blackstone Corporate Funding II S.à.r.l.
"Q3 2024 Dividend" the dividend in respect of the third quarter of 2024 declared by the Company
on 21 October 2024
"Redemption Announcement" the announcements to be made by the Company to Shareholders in advance of any
compulsory redemption
"Registrar" Link Market Services (Jersey) Limited, IFC 5, St. Helier, JE1 1ST, Jersey
"Resolutions" the First EGM Resolution and the Second EGM Resolution
"RIS" regulatory information service, being one of the service providers listed in
Schedule 12 of the Listing Rules
"Sale and Purchase Agreement" the sale and purchase agreement dated 21 November 2024 between the Company,
LuxCo and the Purchaser
"Second EGM" the extraordinary general meeting of the Company convened for 11.00 a.m. on 15
January 2025 at the offices of BNP Paribas S.A. Jersey Branch, IFC 1, The
Esplanade, St Helier, Jersey JE1 4BP (or any adjournment thereof), notice of
which is set out at the end of the Circular
"Second EGM Resolution" the Special Resolution to be proposed at the Second EGM in relation to the
Summary Winding-up
"Second Redemption" has the meaning given in section 2.1 of Part I of the Circular
"Seller Parties" the Company and LuxCo
"Shareholders" holders of Shares
"Shares" ordinary shares of no par value in the capital of the Company that are
redeemable at the option of the Company
"Signal Shares" has the meaning given on page 1 of the Circular
"Singer Capital Markets" Singer Capital Markets Advisory LLP
"Special Resolution" a resolution which requires a two-thirds majority of the Shareholders who,
being entitled to vote, are present in person or by proxy and entitled to vote
and voting at the appropriate meeting
"Summary Winding-up" the proposed Summary Winding-up of the Company under the Companies Law
"Summary Winding-up Costs" has the meaning given in section 2.2 of Part I of the Circular
"Third Redemption" the third redemption of Shares pursuant to the Managed Wind-down, which will
follow completion of the Proposed Transaction
"UK Takeover Code" the City Code on Takeovers and Mergers
1 As calculated in accordance with the section headed "Details of the
Proposed Transaction" on page 7 of the Circular.
2 Subject to postponement in the event of a delay in completion of the
Proposed Transaction and/or in the receipt by the Company of any requisite
regulatory consents.
3 Shareholders can refer to the cashflow profile on page 15 of the Q3 2024
investor report published on the Company's website, set in the context of the
wider report, to consider the relative risks and rewards of the continued
Managed Wind-down.
4 Shareholders are reminded that risk represented by the discounts applied
in modelled valuations take into account that CLO equity is highly geared and
suffers 'first loss' if there are any problems with the CLO.
5 Subject to postponement in the event of a delay in completion of the
Proposed Transaction and/or in the receipt by the Company of any requisite
regulatory consents.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END NOGUPGPWPUPCGQCRecent news on Blackstone Loan Financing
See all newsREG - Official List - Removal - Blackstone Loan Financing Limited
AnnouncementREG - Stock Exch Notice Blackstone Loan Fin - Cancellation - Blackstone Loan Financing Limited
AnnouncementREG - Blackstone Loan Fin - Result of Extraordinary General Meeting
AnnouncementREG - Official List - Suspension - Blackstone Loan Financing Limited
AnnouncementREG - Blackstone Loan Fin - Further re Sale of Assets and Third Redemption
Announcement