RCS - DCM US Multi-Family - DCM3 Series 2022 GB00BPBPX655 Proposal
04/12/2023 17:45
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RNS Number : 6194V DCM US Multi-Family Homes Plc 04 December 2023
THIS NOTICE CONTAINS IMPORTANT INFORMATION THAT IS OF INTEREST TO THE
REGISTERED AND BENEFICIAL OWNERS OF THE SUBJECT SECURITIES. IF APPLICABLE, ALL
DEPOSITORIES, CUSTODIANS AND OTHER INTERMEDIARIES RECEIVING THIS NOTICE ARE
REQUESTED TO EXPEDITE THE RE-TRANSMITTAL TO BENEFICIAL OWNERS OF THE
SECURITIES IN A TIMELY MANNER. IF NOTEHOLDERS ARE IN ANY DOUBT AS TO THE
ACTION THEY SHOULD TAKE, IF ANY, THEY SHOULD IMMEDIATELY CONSULT THEIR OWN
INDEPENDENT PROFESSIONAL ADVISERS AUTHORISED UNDER THE FINANCIAL SERVICES AND
MARKETS ACT 2000 (IF THEY ARE IN THE UNITED KINGDOM) OR ANOTHER APPROPRIATELY
AUTHORISED INDEPENDENT FINANCIAL ADVISER AND TAKE SUCH OTHER ADVICE FROM THEIR
OWN PROFESSIONAL, TAX AND LEGAL ADVISERS AS THEY DEEM NECESSARY.
NOTICE TO NOTEHOLDERS
DCM US MULTI-FAMILY HOMES PLC
(Incorporated in England and Wales with registered number 12575053)
(the "Issuer")
To the holders of those of the Series 2022-DCM3 notes issued by the Issuer on
6 May 2022 with ISIN: GB00BPBPX655 (the "Notes" and the "Noteholders").
Unless otherwise defined in this Notice, capitalised terms used in this Notice
shall have the meanings ascribed to them in the Trust Deed dated 1 July 2020
(as supplemented, restated or amended from time to time) between the Issuer
and Trident Trust Company (Guernsey) Limited (the "Note Trustee" and the
"Trust Deed").
Sureste Properties LLC - proposal
The Issuer hereby notifies the Noteholders that on 21 November 2023 the Issuer
and Note Trustee received from Sureste Properties LLC ("Sureste"), as 100%
owner of DCM Real Estate 3 Inc. (the "Borrower") (and 100% owner of DCM Real
Estate Inc. (the Borrower in respect of Series 2020-DCM1), DCM Real Estate 2
Inc. (the Borrower in respect of Series 2020-DCM2) and DCM Real Estate 4 Inc.
(the Borrower in respect of Series 2022-DCM4), the following proposal (set out
in full below) (the "Proposal"):
***
Sureste Properties LLC
3475 Lenox Road Ste 760
Atlanta, GA 30326
November 21, 2023
DCM US Multi-Family Homes Plc
The Mending Rooms, Park Valley Mills
Meltham Road
Huddersfield HD4 7BH
United Kingdom
Trident Trust Company (Guernsey) Limited
4th Floor, West Wing
Trafalgar Court
Admiral Park, St Peter Port
Guernsey, GY1 2JA
Re: DCM Real Estate Inc., DCM Real Estate 2 Inc., DCM Real Estate 3 Inc. and
DCM Real Estate 4 Inc.
Ladies and Gentlemen:
As you are aware, Sureste Properties LLC, a Delaware limited liability company
("Sureste"), is the sole stockholder of each of DCM Real Estate Inc., a
Delaware corporation, DCM Real Estate 2 Inc., a Delaware corporation, DCM Real
Estate 3 Inc., a Delaware corporation and DCM Real Estate 4 Inc., a Delaware
corporation (collectively, "DCM Real Estate"). DCM Real Estate is a borrower,
and Sureste is a guarantor, in a series of loan agreements (each, a "Loan
Agreement") by and between DCM US Multi-Family Homes PLC, a public limited
company incorporated under the laws of England and Wales ("Issuer"), and DCM
Real Estate. Issuer and Trident Trust Company (Guernsey) Limited, as Note
Trustee, have entered into a Trust Deed, as supplemented from time to time
(the "Trust Deed"), in connection therewith. Funds received in connection with
the loan agreements were used in the acquisition of certain real property
(each, a "Property"). Capitalized terms shall have the meanings set forth in
each Loan Agreement and the Trust Deed.
This letter is intended to set forth Sureste's proposed winding-down of the
Notes. Following approval of this letter, each of the parties would enter into
any amendments to the Loan Agreements, the Trust Deed and/or any ancillary
documents necessary to effectuate the following.
The Noteholders shall form an advisory committee (with each Series being
entitled to nominate up to 3 members of such advisory committee) (the
"Committee"). Sureste and the Committee shall evaluate and value each
outstanding Note on an individual basis and then tie such Note to the
respective Series for the distribution of the proceeds of such Series. Sureste
and the Committee shall hire bankers, appraisers and other third-party
servicers as needed, each of whom shall be approved by the Issuer. The Issuer
shall agree to take direction from the creditors of each Series.
The parties anticipate the following approximate timeline:
(a) By the end of the fourth quarter of 2023, Sureste and the Committee
shall complete an initial evaluation of each Note and each underlying
Property, make an initial determination as to whether to sell or hold each
Note, and make all initial decisions as to the hiring of any bankers and
third-party servicers.
(b) In the first and second quarters of 2024, Sureste will begin
taking all necessary steps in connection with the sale of any of the Notes
determined to be sold. Upon any sale, all proceeds available for distribution
shall be distributed directly to Issuer. The Issuer shall then be responsible
for the distribution of such proceeds to the Noteholders.
(c) By the end of the fourth quarter of 2024, Sureste will have sold
each Property. All proceeds available for distribution will be distributed to
Issuer. The Issuer shall then be responsible for the distribution of such
proceeds to the Noteholders.
The parties acknowledge and agree that the above timetable may be subject to
certain changes in the market which may require Sureste to delay the sale of
one or more of the Properties.
During the time period set forth above, and until the sale of all of the Notes
and the Properties, Carter & Company CPA, LLC or a similar CPA firm, will
provide accounting services and conduct quarterly compilation and reporting
services and provide such information as to the Notes and the Properties to
the Committee and the Issuer.
Sureste and DCM Real Estate (and their affiliates) shall not receive any
compensation for the services provided hereunder, but shall be reimbursed for
all out-of-pocket expenses, third party fees and professional service fees
(including legal and accounting fees). Furthermore, Sureste and DCM Real
Estate (and their affiliates) shall be fully indemnified by the Issuer and the
Noteholders in connection with the foregoing services.
We look forward to your consideration of the above proposal.
Very truly yours,
/s/ Michael Crow
Michael Crow
Chief Executive Officer
***
Sureste gave consent to the Issuer to publish the Proposal for the
Noteholders' information on 28 November 2023. Neither the Issuer nor the
Note Trustee make any recommendations and give no legal or investment advice
in respect of the Proposal or as to the Notes generally. Noteholders should
take and rely on their own independent legal and financial advice, and may not
rely on advice or information provided to the Note Trustee, statements as to
the legal position included in notices issued by the Issuer or the Note
Trustee relating to the Notes or otherwise or the views of the Issuer or the
Note Trustee expressed herein or otherwise. Noteholders should note that the
Proposal relates to the Notes, and also to the Notes issued with respect to
Series 2020-DCM1, Series 2020-DCM2 and Series 2022-DCM4.
Noteholder teleconference
The Issuer hereby notifies Noteholders that at 3.00 pm London time on 12
December 2023 there will be a teleconference for Noteholders with respect to
the Proposal at which Sureste and the Borrower have agreed to make themselves
available. It is proposed that the teleconference be held in two parts, the
first with Sureste and the Borrower in order for Noteholders to ask questions
concerning the Proposal and gives views, if any, and the second part without
Sureste and the Borrower so that Noteholders can ask any questions of the
Issuer and the Note Trustee that they may wish to ask separately (subject
always to the provision herein that Noteholders must take their own legal
advice and may not rely on the advice or views of the Note Trustee or the
Issuer).
Noteholders wishing to join the teleconference are requested to urgently
provide confirmation as to their holdings and evidence of identity to:
Virtus Administration Limited
85 Great Portland Street
London
England
W1W 7LT
Reference: 2022-DCM3
E-mail: kh@virtusadministration.co.uk (mailto:kh@virtusadministration.co.uk)
with a copy to the Note Trustee by e-mail at MSarl@tridenttrust.com
(mailto:MSarl@tridenttrust.com) .
Teleconference details will be provided to any Noteholders following such
confirmation to the Issuer and the Note Trustee. In light of the Proposal
relating to Series 2020-DCM1, Series 2020-DCM2, Series 2022-DCM3 and Series
2022-DCM4, the Issuer proposes that this teleconference be open to the
Noteholders of Series 2020-DCM1, Series 2020-DCM2 and Series 2022-DCM4 as
well. Future meetings convened pursuant to the terms of the Trust Deed may be
held separately in respect of each Series of Notes.
No Further Action by the Issuer or Note Trustee in respect of the Proposal
For the avoidance of doubt (but without prejudice to the exercise of any
discretion, power or authority which the Note Trustee is required, expressly
or impliedly, to exercise in or by reference to the interests of the
Noteholders under the Trust Deed), neither the Issuer nor the Note Trustee
currently intend to take any further action in respect of the Proposal without
the request or direction (including indemnification) of the Noteholders
following the teleconference on 12 December 2023.
Continuing Events of Default under the Loan Agreement and under the Notes
The Issuer confirms for the benefit of the Noteholders that the following
Events of Default are continuing, each relating to the non-payment by the
Borrower of:
(a) Issuer fees and expenses totalling GB£24,963.18 as notified
to the Borrower in the Fee Letter from the Issuer dated 25 September 2023;
(b) the interest payment of US$112,175 due to be paid by the
Borrower to the Issuer on 23 October 2023 pursuant to the terms of the Loan
Agreement, resulting in the Issuer being unable to pay a corresponding
interest payment of US$112,175 to Noteholders on 6 November 2023 pursuant to
the terms of the Trust Deed; and
(c) Issuer fees and expenses totalling GB£24,741.68 as notified
to the Borrower in the Fee Letter from the Issuer dated 23 November 2023.
The Events of Default - right to direct the Note Trustee
Pursuant to Condition 14 (Events of Default), as the above Events of Default
are continuing, the Note Trustee at its discretion may, and if so requested in
writing by the holders of at least one-quarter of the aggregate principal
amount of the Notes then outstanding or if so directed by an Extraordinary
Resolution of the Noteholders shall (subject to the Note Trustee having been
indemnified and/or secured and/or prefunded to its satisfaction), give written
notice to the Issuer (an "Acceleration Notice") that the Notes are, and they
shall accordingly forthwith become, immediately due and repayable at their
Early Redemption Amount, together with accrued interest.
The Security shall become enforceable upon the service of an Acceleration
Notice by the Note Trustee on the Issuer.
Pursuant to Condition 19 (Enforcement), the Note Trustee may at any time at
its discretion and without notice, take such action under or in connection
with any of the Transaction Documents or the Notes or the Coupons as it may
think fit (including, without limitation, directing the Security Trustee to
take any action under or in connection with any of the Transaction Documents
or, at any time after the security has become enforceable, to take steps to
enforce the Security). The Note Trustee shall not be bound to take any such
action unless (i) it shall have been directed by an Extraordinary Resolution
of Noteholders or so requested in writing by the holders of at least
one-quarter in principal amount of the Notes then outstanding and (ii) it
shall have been indemnified and/or secured and/or prefunded to its
satisfaction.
No Further Action by the Note Trustee in respect of the Events of Default
For the avoidance of doubt (but without prejudice to the exercise of any
discretion, power or authority which the Note Trustee is required, expressly
or impliedly, to exercise in or by reference to the interests of the
Noteholders under the Trust Deed), the Note Trustee does not currently intend
to take any further action in respect of the Events of Default without the
request or direction (including indemnification) of the Noteholders as
described above, also in light of the Proposal. The Security Trustee shall
not, and shall not be bound to, take any such action unless (i) instructed by
the Note Trustee and (ii) it shall have been indemnified and/or secured and/or
prefunded to its satisfaction.
Noteholder Contact - the Events of Default
Whether or not Noteholders wish to direct the Note Trustee in respect of the
Events of Default, they are requested urgently (and must, if they wish to
direct the Note Trustee to accelerate or take any other action to enforce the
Notes) to provide confirmation as to their holdings to and evidence of
identity to the Note Trustee by e-mail at: MSarl@tridenttrust.com
(mailto:MSarl@tridenttrust.com) .
Contacts
Noteholders who have any queries regarding this notice may contact the Issuer
at:
Virtus Administration Limited
85 Great Portland Street
London
England
W1W 7LT
Reference: 2022-DCM3
E-mail: kh@virtusadministration.co.uk (mailto:kh@virtusadministration.co.uk)
The information above is provided for the information of Noteholders, but the
Note Trustee makes no representation as to the accuracy or completeness
thereof and cannot accept any liability for any loss caused by any inaccuracy
therein. The Note Trustee makes no recommendations and gives no legal or
investment advice herein or as to the Notes generally. Noteholders should take
and rely on their own independent legal and financial advice, and may not rely
on advice or information provided to the Note Trustee, statements as to the
legal position included in notices issued by the Note Trustee relating to the
Notes or otherwise or the views of the Note Trustee expressed herein or
otherwise.
The Note Trustee reserves all rights to take whatever remedial actions it
deems necessary at any time during an Event of Default or Potential Event of
Default or any other breach, and (i) any failure to take immediate action and
(ii) nothing done by it shall be construed as a waiver of, or a consent by it
to, any breach or potential breach (present or future) of the Trust Deed, the
Conditions, or any other documents relating to the Notes or at law.
The ISIN numbers appearing herein has been included solely for the convenience
of the Noteholders. The Note Trustee assumes no responsibility for the
selection or use of such ISIN numbers and makes no representation as to the
correctness of any ISIN number listed above or printed on the Notes.
This notice is given by the Issuer
DCM US MULTI-FAMILY HOMES PLC
Dated: 4 December 2023
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