REG - Hammerson PLC - Disposal of Hammerson’s interest in Value Retail
22/07/2024 07:00
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RNS Number : 2497X Hammerson PLC 22 July 2024
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THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
22 July 2024
Hammerson plc
("Hammerson" or the "Group" or the "Company")
ISIN: GB0004065016
LSE share code: HMSO / JSE share code: HMN
Disposal of Hammerson's interest in Value Retail
Hammerson is pleased to announce that it has entered into a binding agreement
for the disposal of its entire interest in Value Retail (the "Value Retail
Group Interests") to Silver Bidco Limited ("Bidco"), a newly-formed company
incorporated in Jersey and established by certain affiliates of L Catterton
("L Catterton"), for an enterprise value of £1.5bn(1), generating cash
proceeds of c.£600m (the "Disposal") 1 (#_ftn1) .
Highlights
· Disposal of Hammerson's overweight, non-controlling and
yield-dilutive interest in Value Retail for c.£600m of cash proceeds will:
o ensure a clean exit from a complex structure at an attractive price,
representing an EBITDA multiple of 24x 2 (#_ftn2) ;
o unlock value from 42% of Hammerson's total portfolio 3 (#_ftn3) ,
retiring a historical five-year average cash yield of c.2% 4 (#_ftn4) ; and
o represent an exit cash yield of c.3.4% 5 (#_ftn5) , a 24% discount to GAV
of £2.0bn 6 (#_ftn6) , and crystallising a 10-year IRR of 13%.
· Hammerson intends to use the Disposal proceeds for a combination
of:
o significant and immediate deleveraging through a reduction in net debt,
with pro forma LTV of 23% and net debt: EBITDA of 5.1x;
o reinvestment into assets in its core markets at higher yields and stronger
returns, with a priority on JV consolidation and repurposing asset enhancement
initiatives; and
o a return of capital to shareholders via a share buy back of up to £140m,
representing c. 10% of Hammerson's market capitalisation 7 (#_ftn7) prior to
the date of this announcement.
· The Board of Hammerson (the "Board") also today announces the
intention, following the successful completion of the Disposal, to adopt an
enhanced payout ratio policy for ordinary dividends of c.80-85% of adjusted
earnings.
· The Disposal builds on Hammerson's track record and momentum of
the last three years to accelerate strategic and financial delivery.
o Hammerson will be a retail-anchored, specialist cities business positioned
for growth and value creation, with its entire portfolio comprising leading
city centre destinations.
o The Company is primed to drive both rental and earnings growth through
reinvestment, and operating leverage from its lean and scalable platform.
o In the medium term, Hammerson expects to deliver an annualised total
accounting return ("TAR") of c.10% (assuming stable yields) whilst maintaining
its commitment to a sustainable capital structure and an investment grade
credit rating.
· The Disposal is, in the Hammerson Board's opinion, in the best
interests of shareholders as a whole.
· The Disposal constitutes a "Class 1" transaction for Hammerson
under the current Listing Rules in force as at the date of announcement.
However, the new UK Listing Rules will come into force on 29 July 2024 (as
announced by the FCA on 11 July 2024), when the current Listing Rules will
cease to have effect and there will no longer be a requirement for shareholder
approval of significant transactions. As such, the Disposal is not conditional
on approval by Hammerson's shareholders.
· The Disposal is subject to certain customary antitrust approvals
and completion of the Disposal ("Completion") is expected in H2 2024.
· In addition to the Disposal, Hammerson is proposing to simplify
its share capital through a 1 for 10 share consolidation, and to increase
distributable reserves by reducing the Company's share premium account. A
Circular with more detail, and a notice convening a general meeting, will be
sent to shareholders in due course.
Rita-Rose Gagné, CEO, Hammerson plc, said:
"This is a transformational deal for Hammerson, generating cash proceeds of
c.£600m whilst removing an overweight, low yielding and minority stake, and
positioning us for accelerated growth and value creation.
The Disposal focuses our portfolio on prime urban real estate with a
transformed capital structure and the capacity and capability to advance our
strategy in higher yielding opportunities with stronger returns, whilst
enhancing returns to shareholders.
I'm excited about the opportunity this gives us to build on our momentum and
track record of the last three years. We are at a point in the cycle where I
can now be on the front foot to capture the exceptional value creation
opportunities I see in the near, medium and long term. This is exactly what
this transaction will deliver."
Michael Chu, Global Co-CEO of L Catterton, said:
"With its high quality portfolio, reputation for luxury, and commitment to
delivering a distinctive experience to customers, Value Retail is well
positioned for growth and continued success.
We have deep experience investing in luxury retail, and we are eager to
leverage our operational expertise and global network of established
relationships to partner with Value Retail and propel the business forward."
Principal terms of the Disposal
On 22 July 2024, the Company and Hammerson UK Properties Limited ("HUK"), a
wholly-owned subsidiary of Hammerson, entered into a share purchase agreement
(the "Share Purchase Agreement") pursuant to which HUK has agreed to sell the
entire issued share capital of its wholly owned subsidiary, Hammerson (Value
Retail Investments) Limited (the "Target"), which holds all of Hammerson's
interests in the Value Retail Group, to Bidco in consideration for €705m
(equivalent to c.£600m) of total cash proceeds.
The obligations of the parties to the Share Purchase Agreement to complete the
Disposal are subject to the satisfaction of certain customary antitrust
conditions (the "Conditions").
The consideration will be satisfied through a combination of a payment for the
sale of the shares in the Target and the repayment of certain amounts owed by
the Target to the retained Hammerson Group.
In relation to the Disposal, L Catterton has provided (through one of its
investment vehicles, LC10 International AIV, LP) an equity commitment letter
dated 22 July 2024 to Bidco and Hammerson to ensure that Bidco has the
required funds to fulfil its obligations under the Share Purchase Agreement
and complete the Disposal.
Financial effects of the Disposal and use of proceeds
The Disposal means the Group will forego its share of Value Retail adjusted
earnings (see Appendix 1 for key financial information relating to the
Disposal). For FY 24 interest income on cash received is expected to broadly
replace earnings disposed with Hammerson's interests in Value Retail.
On a pro forma basis (as per Appendix 1), the Disposal will have an immediate
and material strengthening effect on the balance sheet, reducing LTV to 23%
and net debt:EBITDA to 5.1x pre any deployment of capital. Net tangible
assets will be reduced to approximately £1.9bn, or 39p per share.
The proceeds of the Disposal (the "Disposal Proceeds") are intended to be
deployed in line with Hammerson's stated capital allocation framework, namely
to further strengthen the balance sheet, invest for growth and value creation,
and enhance distributions to shareholders.
1. c.£95m to add strength and flexibility to the balance sheet
The Disposal will result in significant and immediate deleveraging while
ensuring that near-term low-coupon debt maturities are covered by cash earning
higher rates of interest. The Board remains committed to maintaining a robust
investment grade credit rating with a target LTV of 30-35% and a net
debt:EBITDA ratio of 6-8x through the cycle. Allocating c.£95m to reduce net
debt alongside existing cash of £688m 8 (#_ftn8) , giving a total pro forma
cash position of c.£798m, means Hammerson's Group debt maturities are covered
until 2027 with low weighted average interest expense until 2028. This
allows the Group flexibility to access the debt markets and refinance as
appropriate to maintain a sustainable balance sheet whilst funding growth.
2. Reinvestment capital for growth and value creation of c.£350m
Building on its strong three-year track record of value creation in core city
centre urban destinations, Hammerson sees an attractive and sizeable pipeline
of near, medium and long-term opportunities for growth and value creation.
Following the Disposal, Hammerson will have the ability to rotate the proceeds
from the low yielding Value Retail investment into higher yielding
opportunities with attractive returns, with £350m allocated to reinvestment.
In the near-term, Hammerson intends to prioritise opportunities within the
existing core portfolio, including JV consolidation, repurposing and asset
enhancement initiatives.
3. Enhanced distributions to shareholders via share buy back of up to
£140m (c. 10% of Hammerson's pre announcement market capitalisation) and
increased dividend payout ratio
Following completion of the Disposal, Hammerson intends to return up to £140m
to shareholders via an on-market share buy back, representing 10% of
pre-announcement market capitalisation 9 (#_ftn9) . As a consequence of the
proposed Share Consolidation (summarised below), the buy back will be subject
to shareholders approving customary, general authorities to (amongst other
things) make market purchases of Hammerson shares. The buy back will also be
subject to shareholders approving the Capital Reduction (as summarised below).
Furthermore, following the successful conclusion of the Disposal, the Board of
Hammerson intends to increase the ordinary dividend payout ratio from 60-70%
to c.80-85% of adjusted earnings, which brings Hammerson in line with its UK
REIT peers.
Medium-term financial framework
Alongside the Disposal, Hammerson today announces an indicative medium-term
financial framework, assuming timely reinvestment of net proceeds and
completion of the share buy back. Outcomes for shorter reporting periods will
be highly dependent on activity levels and prevailing market conditions, with
variances across different components of the portfolio. The framework consists
of:
· GRI CAGR: 4-6%;
· EPS CAGR: 6-8%;
· DPS CAGR: 6-8%; and
· Annualised TAR: c.10% (assuming stable yields).
Risks to Hammerson as a result of the Disposal
Following the Disposal, the Group will have greater concentration risk,
holding fewer asset classes (and lower NTA), and will therefore be more
susceptible to adverse developments in the remaining markets, asset classes
and segments in which the Group operates. In particular, following Completion,
the Group will have greater relative exposure to the risks associated with the
property markets of the UK, France and Ireland, and to fluctuations in the
value of the retained Group's property portfolio.
Therefore, should any part of the retained Group underperform, this may have a
larger relative impact on its financial condition, results, profitability,
and/or future prospects than it would have had on the entire Group before the
Disposal.
The geographical distribution of the Retained Group's revenue after the
Disposal will also be different to that of the Group at the date of this
announcement. This means that adverse financial market movements or economic
conditions in the region and/or in one of the markets in which the retained
Group operates may have a larger relative impact on the capital position,
financial condition, results, profitability and/or future prospects of the
retained Group than they would have done prior to the Disposal.
The loss on disposal will significantly reduce the Group's distributable
reserves prior to the completion of the Capital Reduction (as defined below),
which is subject among other things to shareholder approval.
New UK Listing Rules
The Disposal constitutes a "Class 1" transaction for Hammerson under the
current Listing Rules in force as at the date of this announcement. However,
the new UK Listing Rules will come into force on 29 July 2024 (as announced by
the FCA on 11 July 2024), when the current Listing Rules will cease to have
effect and there will no longer be a requirement for shareholder approval of
significant transactions. As such, the Disposal is not conditional on
approval by Hammerson's shareholders.
Further information relating to the Disposal, as required by the new UK
Listing Rules, is set out in the Appendices to this announcement.
Completion of the Disposal is also subject to the customary Conditions
mentioned above.
Advisers
Eastdil Secured International Limited is acting as Lead Financial Adviser to
Hammerson. Morgan Stanley & Co. International plc is acting as Financial
Adviser and Corporate Broker to Hammerson. Lazard & Co., Limited is acting
as Financial Adviser to the Board of Hammerson. Slaughter and May is acting as
legal adviser to Hammerson. J.P. Morgan is acting as sole financial adviser to
L Catterton. Latham & Watkins LLP is acting as legal counsel to L
Catterton.
Information on Value Retail
Through its affiliate The Bicester Collection, Value Retail specialises
exclusively in the creation and operation of luxury shopping destinations.
In the UK and Europe it operates nine Villages outside of Barcelona, Brussels,
Dublin, Frankfurt, London, Paris, Madrid, Milan, and Munich.
As at 31 December 2023, the gross asset value of Hammerson Group's interest
was £1.9bn 10 (#_ftn10) . For the year ended 31 December 2023, the profits
attributable to the Value Retail Group Interests was £32.1m. Value Retail is
managed by a team led by Global President, Chris Cabot, and CEO Europe,
Jose-Luis Duran.
Information on L Catterton and Bidco
L Catterton is a market-leading consumer-focused investment firm, managing
approximately $35 billion of equity capital across three multi-product
platforms: private equity, credit, and real estate. The firm's funds have the
ability to invest between $5 million and $5 billion, and across the capital
structure, in well-positioned consumer businesses. Leveraging deep category
insight, operational excellence, and a broad network of strategic
relationships, L Catterton's team of more than 200 investment and operating
professionals across 17 offices partners works with management teams to drive
differentiated value creation across its portfolio. Founded in 1989, the firm
has made over 275 investments in some of the world's most iconic consumer
brands. For more information about L Catterton, please
visit https://www.lcatterton.com/ (https://www.lcatterton.com/) .
Bidco is a private limited company incorporated in Jersey. Bidco is a
new-formed company indirectly owned by L Catterton. Pursuant to an equity
commitment letter dated 22 July 2024 from LC10 International AIV, LP (an
investment vehicle of L Catterton), Bidco will be provided with the required
funds to fulfil its obligations under the Share Purchase Agreement and
complete the Disposal.
Proposed Share Consolidation and Capital Reduction
In addition to the Disposal, Hammerson is proposing to simplify its share
capital through a 1 for 10 share consolidation, subdivision and re-designation
of the ordinary shares in the Company (the "Share Consolidation") and to
increase distributable reserves by reducing the Company's share premium
account (the "Capital Reduction"). The Hammerson Board proposes to make these
changes and a circular, with more detail on the Share Consolidation and the
Capital Reduction, and a notice convening a general meeting, will be sent to
shareholders in due course.
Summary of the Share Consolidation
The Hammerson Board is proposing the Share Consolidation in order to (i)
reduce the number of ordinary shares in issue, (ii) create a nominal value for
an ordinary share which should be significantly below the price at which
shares trade on the open market, and (iii) reduce the likelihood of there
being large dealing spreads in ordinary shares.
The Share Consolidation will involve the following steps:
· each 10 ordinary shares will be consolidated into one
consolidated ordinary share of £0.50; and
· each such consolidated ordinary share of £0.50 will then
immediately be subdivided and redesignated into one new ordinary share of
£0.05 and nine Deferred Shares of £0.05.
The effect of the Share Consolidation will be that Hammerson will need to seek
the renewal of its customary, general authorities to (amongst other things)
allot Hammerson shares, disapply pre-emption rights and make market purchases
of Hammerson shares (the "General Authorities"). The intended return of
capital to shareholders via a share buy back of up to £140m will be
contingent on the General Authorities being approved by shareholders.
Summary of the Capital Reduction
The Capital Reduction involves a reduction in Hammerson's share premium
account, which is a non-distributable reserve. Reducing amounts standing to
the credit of this reserve will increase Hammerson's distributable reserves.
Further details on the Share Consolidation, the Capital Reduction and the
General Authorities, including timetable and a notice convening a general
meeting, will be contained in a circular to be published in due course.
Investor Presentation
Hammerson will host a virtual presentation for analysts and investors at
8:30am UK time on Monday 22 July 2024, followed by Q&A.
Date & Time: 22 July 2024, 08:30 (BST)
Webcast link: https://hammerson-plc.open-exchange.net/
(https://hammerson-plc.open-exchange.net/)
Market Abuse Regulation Statement
This announcement contains inside information.
The person responsible for arranging the release of this announcement on
behalf of the Company is Alex Dunn, General Counsel & Company Secretary.
The announcement above has also been released on the SENS system of the
Johannesburg Stock Exchange and on Euronext Dublin.
Enquiries
Hammerson plc
Investor & Media Contact
Josh Warren, Director of Strategy, Commercial Finance and Investor Relations +44 (0)20 7887 1053
MHP for Hammerson
Oliver Hughes, Ollie Hoare
+44 (0)7885 224 532
+44 (0)7817 458 804
IMPORTANT NOTICE
This announcement has been issued by and is the sole responsibility of the
Company. The information contained in this announcement is for background
purposes and does not purport to be full or complete.
The information contained in this announcement is for background purposes only
and no reliance may or should be placed by any person for any purpose
whatsoever on the information contained in this announcement or on its
completeness, accuracy or fairness. Recipients of this announcement should
conduct their own investigation, evaluation and analysis of the business, data
and property described in this announcement. This announcement does not
constitute a recommendation concerning any investor's decision or options with
respect to the Disposal. The information in this announcement is subject to
change.
This announcement is not intended to, and does not constitute or form part of,
any offer to sell or issue or any solicitation of an offer to purchase,
subscribe for, or otherwise acquire, any securities or a solicitation of any
vote or approval in any jurisdiction.
Eastdil Secured International Limited ("Eastdil Secured"), which is authorised
and regulated by the Financial Conduct Authority in the United Kingdom, is
acting exclusively as financial adviser for Hammerson and no one else in
connection with the matters set out in this announcement. Eastdil Secured
will not be responsible to anyone other than Hammerson for providing the
protections afforded to clients of Eastdil Secured, or for providing advice in
connection with the content of this announcement or any matter referred to
herein. Neither Eastdil Secured nor any of its subsidiaries, affiliates or
branches 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 Eastdil Secured in
connection with this announcement, any statement or other matter or
arrangement referred to herein or otherwise.
Morgan Stanley & Co. International plc ("Morgan Stanley"), which is
authorised by the Prudential Regulation Authority and regulated by the
Financial Conduct Authority and the Prudential Regulation Authority in the UK
is acting as financial adviser exclusively for Hammerson and no one else in
connection with the Disposal. In connection with the Disposal, Morgan Stanley,
its affiliates and their respective directors, officers, employees and agents
will not regard any other person as their client, nor will they be responsible
to any person other than Hammerson for providing the protections afforded to
clients of Morgan Stanley or for providing advice in connection with the
Disposal, this announcement or any other matter referred to herein.
Lazard & Co., Limited ("Lazard"), which is authorised and regulated in the
United Kingdom by the Financial Conduct Authority, is acting exclusively as
financial adviser to Hammerson and no one else in connection with the Disposal
and will not be responsible to anyone other than Hammerson for providing the
protections afforded to clients of Lazard & Co., Limited nor for providing
advice in relation to the Disposal or any other matters referred to in this
announcement. Neither Lazard & Co., Limited 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 Lazard & Co., Limited in connection with the
Disposal, this announcement, any statement contained herein or otherwise.
J.P. Morgan Securities plc ("J.P. Morgan") is authorised in the United Kingdom
by the Prudential Regulation Authority (the "PRA") and regulated by the PRA
and the Financial Conduct Authority, is acting as sole financial adviser
exclusively for L Catterton and no one else in connection with the Disposal
and will not regard any other person as its client in relation to the Disposal
and will not be responsible to anyone other than L Catterton for providing the
protections afforded to clients of J.P. Morgan or its affiliates, nor for
providing advice in relation to the Disposal or any other matter or
arrangement referred to herein.
Apart from the responsibilities and liabilities, if any, which may be imposed
on any of the financial advisers by the Financial Services and Markets Act
2000, as amended, or the regulatory regime established thereunder, or under
the regulatory regime of any jurisdiction where the exclusion of liability
under the relevant regulatory regime would be illegal, void or unenforceable,
neither the financial advisers nor any of their respective subsidiaries,
branches or affiliates, accept any duty, liability or responsibility
whatsoever (whether direct or indirect) to any person for any acts or
omissions of the Company as to the contents of this announcement or make any
representation or warranty, express or implied, as to the contents of this
announcement including its accuracy, completeness or verification or for any
statement made or purported to be made by it, or on its behalf, in connection
with the Company or the Disposal and nothing in this announcement shall be
relied upon as a promise or representation in this respect, whether or not as
to the past or future. The financial advisers and their respective
subsidiaries, branches and affiliates accordingly disclaim, to the fullest
extent permitted by law, all and any duty, liability and responsibility
whatsoever arising in tort, contract or otherwise which any of them might
otherwise have in respect of this announcement or any such statement.
Neither the contents of the Company's website nor any website accessible by
hyperlinks on the Company's website is incorporated in, or forms part of, this
announcement.
None of the financial advisers any of their respective affiliates accepts any
responsibility or liability whatsoever for or makes any representation or
warranty, express or implied, as to this announcement, including the truth,
accuracy, fairness, sufficiency or completeness of the information or the
opinions or beliefs contained in this announcement (or any part hereof). None
of the information in this announcement has been independently verified or
approved by the financial advisers or any of their respective affiliates. Save
in the case of fraud, no responsibility or liability is accepted by the
financial advisers or any of their respective affiliates for any errors,
omissions or inaccuracies in such information or opinions or for any loss,
cost or damage suffered or incurred howsoever arising, directly or indirectly,
from any use of this announcement or its contents or otherwise in connection
with this announcement.
No person has been authorised to give any information or to make any
representations other than those contained in this announcement and, if given
or made, such announcements must not be relied on as having been authorised by
the Company, the financial advisers or any of their respective affiliates.
Subject to the Listing Rules, the Prospectus Regulation Rules, the Disclosure
Guidance and Transparency Rules and the Market Abuse Regulation ("MAR"), the
issue of this announcement and any subsequent announcement shall not, in any
circumstances, create any implication that there has been no change in the
affairs of the Group since the date of this announcement or that the
information contained in it is correct as at any subsequent date.
This announcement contains "forward-looking statements" which includes all
statements other than statements of historical fact, including, without
limitation, those regarding the Company's financial position, business
strategy, plans and objectives of management for future operations, or any
statements preceded by, followed by or that include the words "targets",
"believes", "expects", "aims", "intends", "will", "may", "anticipates",
"would", "could" or similar expressions or negatives thereof. Such
forward-looking statements involve known and unknown risks, uncertainties and
other important factors beyond the Company's control that could cause the
actual results, performance or achievements of the Company to be materially
different from future results, performance or achievements expressed or
implied by such forward-looking statements. Such forward-looking statements
are based on numerous assumptions regarding the Company's present and future
business strategies and the environment in which the Company will operate in
the future. These forward-looking statements speak only as at the date of this
announcement. None of the Company, the financial advisers or their respective
affiliates undertakes or is under any duty to update this announcement or to
correct any inaccuracies in any such information which may become apparent or
to provide you with any additional information, other than any requirements
that the Company may have under applicable law or the Listing Rules, the
Prospectus Regulation Rules, the Disclosure Guidance and Transparency Rules or
MAR. To the fullest extent permissible by law, such persons disclaim all and
any responsibility or liability, whether arising in tort, contract or
otherwise, which they might otherwise have in respect of this announcement.
The information in this announcement is subject to change without notice.
No statement in this announcement is intended as a profit forecast and no
statement in this announcement should be interpreted to mean that the future
earnings per share, profits, margins or cash flows of Hammerson following the
Disposal will necessarily match or be greater than the historical published
earnings per share, profits, margins or cash flows of Hammerson.
The distribution of this announcement in or from certain jurisdictions may be
restricted or prohibited by the laws of any jurisdiction other than the UK.
Recipients of this announcement are required to inform themselves of, and
comply with, all restrictions or prohibitions in such other jurisdictions. Any
failure to comply with applicable requirements may constitute a violation of
the laws and/or regulations of such other jurisdictions.
This announcement has been prepared for the purposes of complying with the
applicable law and regulation of the UK (including the UK Listing Rules and
the Disclosure Guidance and Transparency Rules) and the information disclosed
may not be the same as that which would have been disclosed if this
announcement had been prepared in accordance with the laws and regulations of
any jurisdiction outside of the UK.
Save as required by MAR, the Disclosure Guidance and Transparency Rules, the
UK Listing Rules or by applicable law, each of Hammerson, Eastdil Secured,
Morgan Stanley and Lazard expressly disclaim any intention, obligation or
undertaking to update, review or revise any of the information or the
conclusions contained herein, including forward-looking or other statements
contained in this announcement, or to correct any inaccuracies which may
become apparent whether as a result of new information, future developments or
otherwise.
APPENDIX I
KEY FINANCIAL INFORMATION RELATING TO THE DISPOSAL
To assist with the assessment of the valuation of the Value Retail Group
Interests, below is a summary of the key financials.
Income statement - Value Retail (HMSO share)
Year ended 31 December 2022 Year ended 31 December 2023
(£m)
(£m)
IFRS profit/(loss) for the year (5.3) 14.8
Adjusted earnings 27.4 32.1
Balance sheet - Value Retail (HMSO share)
Year ended 31 December 2022 Year ended 31 December 2023
(£m)
(£m)
Investment property valuation 1,887.0 1,885.7
Investment in associates 1,189.4 1,115.0
Supporting calculations: Value Retail financials, key Group and Disposal
metrics
Income statement Year ended 31
December 2023
ARA 11 (#_ftn11) £m
GRI pg.152 162
NRI pg.152 115
Administration expenses pg.152 (51)
EBITDA 12 (#_ftn12) pg.152 (A) 64
Adjusted finance costs 13 (#_ftn13) (29)
Taxation pg.152 (3)
Adjusted earnings pg.152 (B) 32
Distributions received pg. 188 74
5 year average distributions 14 (#_ftn14) (C) 20
Balance Sheet December 2023
ARA £m
IFRS GAV pg. 153 1,886
Loans pg. 153 (794)
Other balance sheet items pg. 153 23
IFRS NAV pg. 153 1,115
Deferred Tax - 50% share pg. 144 101
Fair value of interest rate swaps pg. 144 (22)
EPRA NTA (D) 1,194
GAV reconciliation € 15 (#_ftn15) ARA €m
IFRS GAV as reported £1,886m converted to € pg. 153 2,224
Equity portion of participative loans 16 (#_ftn16) 175
Total GAV (E) 2,399
Enterprise Value(16) ARA €m
Gross Proceeds (F) 705
Loans £794m converted to € pg. 153 936
Secured debt held within the participative loans(15) 67
Cash and deposits(15) (79)
Other balance sheet items (net) (15) 160
Intercompany balances 17 (#_ftn17) 27
Total Consideration (G) 1,816
Enterprise Value £m
Total Consideration £ equivalent(15) (H) 1,540
Discount to GAV (G)/(E) -24%
Earnings and cash yield
Earnings yield on NTA (B)/(D) 2.7%
Cash yield on NTA (C)/(D) 1.7%
Key Disposal metrics
GAV price/discount (G) & (G)/(E) €1,816m/24%
Cash proceeds(15) €705m/£600m
2023 EV/EBITDA (H)/(A) 24x
Exit cash yield (C)/(F) 3.4%
Exit earnings yield (B)/(F) 5.4%
Group: pro forma Hammerson LTV, Net debt:EBITDA & NTA per share
Credit metrics Valuation Net debt EBITDA
£m £m £m
Dec-23 3,891 1,326 166
Net Proceeds from disposals of:
- Union Square 18 (#_ftn18) (121) (111) (15)
- O'Parinor 19 (#_ftn19) (7) (7) -
- Value Retail (1,115) (598) (32)
Pro forma 2,648 610 119
Pro forma LTV 23% Pro forma Net debt:EBITDA 5.1x
NTA No. of Shares NTA per share
£m pg. 145 ARA £
Dec 23 - as reported 2,542 5,002 0.51
Value Retail EPRA NTA 20 (#_ftn20) (1,194)
Cash proceeds 598
Pro forma EPRA NTA 1,946 5,002 0.39
Sources of Financial Information
Unless otherwise stated, all financial information relating to Hammerson and
Value Retail disclosed in this announcement (including these Appendices) has
been extracted, without material adjustment, from the Hammerson's 2022 and
2023 published audited annual report and accounts.
APPENDIX II
MATERIAL CONTRACTS
1. MATERIAL CONTRACTS OF THE HAMMERSON GROUP
1.1 Share Purchase Agreement
On 22 July 2024, the Company and HUK (the "Seller"), a wholly-owned subsidiary
of Hammerson, entered into the Share Purchase Agreement pursuant to which
HUK has agreed to sell the entire issued share capital of the Target, which
holds all of Hammerson's interests in the Value Retail Group, to Bidco (the
"Purchaser") in consideration for €705m (equivalent to c.£600m) of total
cash proceeds.
Conditions precedent to Completion
The obligations of the parties to the Share Purchase Agreement to complete the
Disposal are subject to the satisfaction of certain customary antitrust
conditions.
Consideration
The total consideration for the Disposal of the Value Retail Group Interests
(including amounts outstanding under a term loan agreement between Hammerson
and Value Retail) will be the payment of EUR 705,000,000, minus an amount in
EUR equal to: (i) the net inter-company balance between the Group excluding
the Target (the "Retained Group") and the Target; and (ii) any leakage
adjustment amounts (the "Consideration").
The net inter-company balance will be repaid by the Purchaser on behalf of the
Target at or prior to Completion, which shall extinguish any and all
outstanding liabilities between the Target and members of the Retained Group
in respect of the inter-company balances.
Disposal Proceeds
The proceeds from the Purchaser are expected to be c.£600m payable on
Completion.
Warranties
In the Share Purchase Agreement, Hammerson and HUK provide only limited
warranties to the Purchaser given the nature of the Disposal, including as to
Hammerson and HUK's authority to enter into the Share Purchase Agreement and
Hammerson's and HUK's ability to complete the Disposal, as well as HUK's
ownership of the shares in the Target, and the Target's ownership of the Value
Retail Group Interests. Customary tax warranties in respect of the Target are
also given.
In the Share Purchase Agreement, the Purchaser has given customary warranties
to HUK, including confirming the Purchaser's authority to enter into the Share
Purchase Agreement.
Indemnities
HUK has agreed to a customary indemnity in relation to a pre-signing
reorganisation of the Value Retail Group Interests (the "Reorganisation"),
pursuant to which HUK has agreed to indemnify the Purchaser against direct
losses arising from the implementation of the Reorganisation or any failure by
any member of the Group or the Retained Group to implement the Reorganisation
in accordance with the Reorganisation steps plan and/or applicable law (the
"Reorganisation Indemnity").
Parent Company Guarantee
The Company has given to the Purchaser an irrevocable and unconditional
guarantee in respect of HUK's obligations under the Share Purchase Agreement
in respect of: (i) any leakage; (ii) any claims under any of the warranties
given by HUK; (iii) any claim under the Reorganisation Indemnity; and/or (iv)
any claim under the Tax Covenant.
Limitations on liability
Claims under the Share Purchase Agreement are subject to customary financial
and other limitations of liability.
Termination
If the Conditions are not fulfilled on or before 5.00pm 15 months from the
date of the Share Purchase Agreement (the "Long-Stop Date"), then HUK or Bidco
is entitled to terminate the Share Purchase Agreement.
In addition, if the respective obligations of HUK and/or the Purchaser are not
complied with on the date of Completion, the Share Purchase Agreement may be
terminated by the Purchaser (in the case of non-compliance by HUK) or, as the
case may be, HUK (in the case of non-compliance by the Purchaser).
Governing law
The Share Purchase Agreement is governed by English
law.
1.2 Tax Covenant
HUK has given a customary tax covenant (the "Tax Covenant") in favour of the
Purchaser which covers any taxation in respect of the period prior to
Completion, subject to usual exclusions for a transaction of this nature.
The Tax Covenant is governed by English law.
1.3 Italie Deux SPA and Italik SPA
On 31 March 2023, Hammerson Centre Commercial Italie, a wholly owned
subsidiary of the Company, entered into a sale and purchase agreement with two
wholly owned subsidiaries of Ingka Centres (the "Italie Deux SPA") pursuant to
which Hammerson Centre Commercial Italie disposed of its 25% stake in the
Italie Deux shopping centre ("Italie Deux").
On 31 March 2023, Hammerson France, a wholly owned subsidiary of the Company,
entered into a sale and purchase agreement with a wholly owned subsidiary of
Ingka Centres (the "Italik SPA") pursuant to which Hammerson France disposed
of its 100% interest in the extension to the Italie Deux shopping centre known
as 'Italik' ("Italik") to Ingka Centres.
The total cash consideration from the Italie Deux disposal and the Italik
disposal was €164 million.
The Italie Deux SPA and the Italik SPA are governed by French law.
1.4 Union Square SPA
On 23 February 2024, HUK entered into a sale and purchase agreement with an
affiliate of Lone Star Real Estate Fund VI, L.P. (the "Union Square Buyer")
pursuant to which HUK disposed of its 100% interest in the Union Square
shopping centre in Aberdeen (the "Union Square SPA").
Structure and consideration
Under the Union Square SPA, the purchase price payable to HUK was £111
million, subject to NAV adjustments. A deposit of £11.1 million was paid by
the Union Square Buyer on the date of the Union Square SPA and held in escrow
until completion. The remainder of the purchase price was paid on completion.
The Union Square SPA contained conduct of business provisions to govern
arrangements between the parties between signing and completion. Completion
was not subject to any conditions and occurred on 15 March 2024.
Warranties, limitations on liabilities and indemnities
HUK gave fundamental warranties in respect of due incorporation and title and
capacity, as well as certain business and tax warranties.
Governing law
The Union Square SPA is governed by English law.
1.5 2021 JPY Revolving Credit Facility Agreement
On 18 June 2021, the Company as borrower entered into a JPY 7,760,750,000
revolving credit facility with MUFG Bank Ltd. as lender (the "2021 JPY
Revolving Credit Facility Agreement").
Purpose
Advances under the 2021 JPY Revolving Credit Facility Agreement may be used
for general corporate purposes including refinancing certain existing
indebtedness.
Maturity
The maturity date of the 2021 JPY Revolving Credit Facility Agreement is 18
June 2026.
Governing law
The 2021 JPY Revolving Credit Facility Agreement is governed by English law.
1.6 2021 Multicurrency Revolving Credit Facility Agreement
On 18 June 2021, the Company as borrower entered into a £150,000,000
multicurrency syndicated revolving credit facility with Barclays Bank plc as
facility agent and Barclays Bank plc, BNP Paribas, London Branch and JPMorgan
Chase Bank, N.A., London Branch as lenders (the "2021 Multicurrency Revolving
Credit Facility Agreement").
Purpose
Advances under the 2021 Multicurrency Revolving Credit Facility Agreement may
be used for general corporate purposes including refinancing certain existing
indebtedness.
Maturity
The maturity date of £50,000,000 of the commitments under the 2021
Multicurrency Revolving Credit Facility Agreement was 18 June 2024. The
maturity date of £100,000,000 of the commitments under the 2021 Multicurrency
Revolving Credit Facility Agreement is 18 June 2026.
Governing law
The 2021 Multicurrency Revolving Credit Facility Agreement is governed by
English law.
1.7 2022 Multicurrency Revolving Credit Facility Agreement
On 29 April 2022, the Company as borrower entered into a £463,000,000
multicurrency syndicated revolving credit facility with Barclays Bank plc as
facility agent and Industrial and Commercial Bank of China Limited, London
Branch, Lloyds Bank PLC, Mizuho Bank, Ltd., Morgan Stanley Bank, N.A., First
Commercial Bank Ltd, London Branch, Agricultural Bank of China Limited, London
Branch, Crédit Industriel et Commercial, London Branch, Barclays Bank PLC,
BNP Paribas, London Branch, and MUFG Bank, Ltd. as lenders (the "2022
Multicurrency Revolving Credit Facility Agreement", and, together with the
2021 JPY Revolving Credit Facility Agreement and the 2021 Multicurrency
Revolving Credit Facility Agreement, the "Revolving Credit Facilities").
Purpose
Advances under the 2022 Multicurrency Revolving Credit Facility Agreement may
be used for general corporate purposes including refinancing certain existing
indebtedness.
Maturity
The maturity date of the 2022 Multicurrency Revolving Credit Facility
Agreement is 29 April 2027.
Governing law
The 2022 Multicurrency Revolving Credit Facility Agreement is governed by
English law.
1.8 Note Purchase Agreements
The following unsecured notes, which were issued by the Company on 21 November
2016 pursuant to a note purchase agreement, which was amended on 30 June 2020
(the "Note Purchase Agreement"), are outstanding:
(i) EUR 70,000,000 1.61% Series C Senior Notes due 11 January
2026;
(ii) EUR 12,714,240 1.79% Series D Senior Notes due 11 January
2028; and
(iii) EUR 5,800,000 2.05% Series E Senior Notes due 11 January
2031,
(the "Private Placement Senior Notes").
The proceeds from the Private Placement Senior Notes may be used for general
corporate and working capital purposes and refinancing certain existing
indebtedness.
The Note Purchase Agreement permits, and, if any subsidiary acts as a
borrower, guarantor or other obligor under any Principal Credit Facility (as
defined in the Note Purchase Agreement), require, the Company to obtain
subsidiary guarantees of its obligations under and in respect of the Note
Purchase Agreement and the Private Placement Senior Notes; however, as at the
date of this announcement, no such guarantees have been granted.
The Note Purchase Agreement is governed by English law.
1.9 Series of Bonds
The Company has issued several series of bonds. The following bonds are
outstanding:
(i) £200,000,000 7.25% bonds due 21 April 2028 constituted by
a trust deed dated 21 April 1998 (the "Principal Trust Deed") between the
Company and The Law Debenture Trust Corporation p.l.c. (the "Trustee") (the
"Original 2028 Bonds");
(ii) £100,000,000 7.25% bonds due 21 April 2028 constituted
by a tenth supplemental trust deed dated 6 September 2023 between the Company
and the Trustee, supplemental to the Principal Trust Deed and the eighth
supplemental trust deed dated 4 December 2009 (the "New 2028 Bonds", and
together with the Original 2028 Bonds, the "2028 Bonds");
(iii) £211,608,000 6.00% bonds due 23 February 2026 constituted
by a fifth supplemental trust deed dated 23 February 2004 between the Company
and the Trustee, supplemental to the Principal Trust Deed, the first
supplemental trust deed dated 29 June 1999, the second supplemental trust deed
dated 31 March 2000, the third supplemental trust deed dated 15 March 2001 and
the fourth supplemental trust deed dated 20 June 2001 (the "2026 Bonds"); and
(iv) £338,300,000 3.50% bonds due 27 October 2025 constituted
by a trust deed dated 27 October 2015 between the Company and the Trustee (the
"2025 Bonds").
On 16 October 2023, the Original 2028 Bonds and the New 2028 Bonds were
consolidated to form a single series. The 2028 Bonds trade interchangeably and
have an aggregate principal amount of £300,000,000.
In addition, the Company has guaranteed the €700,000,000 1.75% bonds due 3
June 2027 issued by Hammerson Ireland Finance Designated Activity Company and
constituted by a trust deed dated 3 June 2021 between Hammerson Ireland
Finance Designated Activity Company, the Company and the Trustee (the "2027
Bonds", and together with the 2028 Bonds, the 2026 Bonds and the 2025 Bonds,
the "Bonds").
The terms and conditions of the Bonds and the related documents are governed
by English law.
2. Material contracts of the Value Retail Group Interests
2.1 Value Retail Governance Documents
The Group has an interest in the Value Retail business. A summary of the Value
Retail business is included this announcement.
The Group holds interests at three levels of the Value Retail group:
(i) Value Retail plc -Value Retail plc and its subsidiaries
provide property development and property management services to the owners
and operators of the nine Value Retail shopping Villages under management and
service agreements.
(ii) Sponsor level entities-Hammerson owns interests in
Bicester Investors Limited Partnership ("BILP") and Bicester Investors II
Limited Partnership ("BILP II") in connection with its investment in Bicester
Village and in VR European Holdings B.V. ("VREH") in connection with the Value
Retail European shopping villages. The sponsor level entities own a proportion
of the equity interests in each of the asset level companies which hold the
property interests in the Value Retail shopping villages.
(iii) Asset level entities-In addition to its interests in the
sponsor level entities, the Group holds interests directly and indirectly in
many of the asset level entities which hold the property interests in the
Value Retail shopping villages. These investments constitute a mixture of debt
and equity interests.
The Group holds:
(i) a 24.4042% interest in Value Retail plc through the Value
Retail Group Interests;
(ii) a 24.2814% beneficial interest in VREH through the Value
Retail Group Interests;
(iii) a total economic interest of 50% in Bicester Village
through a combination of its interests in BILP and BILP II and direct and
indirect investments in the asset level entities, Value Retail Investors
Limited Partnership ("VRILP") and Value Retail Investors II Limited
Partnership ("VRILP II"). The Group also holds an interest in Value Retail
Investors III Limited Partnership, which owns a piece of land adjacent to
Bicester Village; and
(iv) direct and indirect investments in asset level entities
which hold shopping villages within Value Retail's European portfolio.
A proportion of the Group's holding in Value Retail plc and the sponsor level
entities is also held on bare trust pursuant to two declarations of trust.
Overarching agreements
In addition to the constitutional documents of sponsor level entities in which
Hammerson holds an interest, the Group's investments in Value Retail plc and
in the sponsor level entities of the Value Retail business are governed by: a
nominee agreement dated 28 July 1998 and amended and restated by a
supplemental agreement between certain investors in Value Retail, including
HUK, dated 12 March 2007; a deed of adherence entered into by a Group company
on 10 October 2001 when the Group initially invested in Value Retail under
which Hammerson adheres to a memorandum of agreement between certain investors
in Value Retail; an umbrella agreement dated 12 March 2007; a sponsors rights
deed dated 19 July 2012 (as amended and restated from time to time); and a
term loan agreement dated 19 July 2012 (as amended and restated from time to
time) (together the "Overarching Agreements"). These agreements also govern
the relationship between the investors in sponsor level entities and Value
Retail plc.
The Group's investment in Value Retail plc is also subject to the articles of
association of Value Retail plc.
Pursuant to the Overarching Agreements collectively, there are certain
restrictions on transfers by the Group of its interests in Value Retail plc or
any sponsor level entities to a person other than a member of the Group. The
Overarching Agreements also contain certain provisions which apply in respect
of a change of control of Hammerson or a relevant affiliate. In addition,
certain of the Group's governance and information rights also terminate upon a
change of control of Hammerson (subject to certain other conditions being
satisfied) or where any member of the Group ceases to hold 20% or more of the
interests in the sponsor level entities.
VREH
The Group's investment in VREH is also governed by the terms of a nominee
agreement which relates to the holding by a nominee of the shares in VREH for
the beneficial owners of the shares (the "Nominee Agreement").
Under the terms of the Nominee Agreement, the nominee is obliged to account to
the beneficial owners of the VREH shares for all dividends and other
distributions received in respect of the VREH shares. Hammerson is also
subject to restrictions on the transfer of its interest in VREH under this
agreement.
Bicester Village
The Group's investment in Bicester Village is also governed by the terms of
four limited partnership agreements (the "Bicester LPAs") relating to BILP and
BILP II at the sponsor level and VRILP and VRILP II (the "Bicester Investor
LPAs") at the asset level.
Pursuant to the terms of the Bicester LPAs, the Group has rights to receive
certain distributions in cash or in specie (provided in each case that all
relevant conditions are met), including:
(i) distributions from the Bicester sponsor level entities;
(ii) a preferred return on its investments in the Bicester
asset level entities; and
(iii) other distributions from the Bicester asset level
entities.
In addition, BILP and BILP II are entitled, under the terms of the Bicester
Investor LPAs, to receive distributions from the relevant Bicester asset level
entity in which they interested, provided in each case that certain conditions
are met.
The Bicester LPAs permit the transfer of the Group's interests to members of
the Group but contain certain restrictions on transfers to third parties.
APPENDIX III:
SIGNIFICANT CHANGE STATEMENT
1. THE RETAINED GROUP
There has been no significant change in the financial performance or financial
position of the Retained Group since 31 December 2023, the end of the last
financial period for which financial information of the Group has been
published.
2. VALUE RETAIL GROUP INTERESTS
There has been no significant change in the financial performance or financial
position of the Value Retail Group Interests since 31 December 2023, the end
of the last financial period for which financial information of the Group has
been published.
APPENDIX IV:
LEGAL AND ARBITRATION PROCEEDINGS
1. SIGNIFICANT LITIGATION OF THE HAMMERSON GROUP
There are no governmental, legal or arbitration proceedings (including any
such proceedings which are pending or threatened of which the Company is
aware) during the period covering the 12 months preceding the date of this
document which may have, or have had in the recent past, significant effects
on the financial position or profitability of Hammerson.
2. SIGNIFICANT LITIGATION OF THE VALUE RETAIL GROUP INTERESTS
There are no governmental, legal or arbitration proceedings (including any
such proceedings which are pending or threatened of which the Company is
aware) during the period covering the 12 months preceding the date of this
document which may have, or have had in the recent past, significant effects
on the financial position or profitability of the Value Retail Group
Interests.
APPENDIX V:
RELATED PARTY TRANSACTIONS
Details of the related party transactions (which for these purposes are those
set out in the standards adopted according to Regulation (EC) No 1606/2002)
that Hammerson has entered into:
· during the financial year ended 31 December 2021 are set out in
note 28 on page 148 of the Company's 2021 Annual Report;
· during the financial year ended 31 December 2022 are set out in
note 27 on page 180 of the Company's 2022 Annual Report; and
· during the financial year ended 31 December 2023 are set out in
note 26 on page 170 of the Company's 2023 Annual Report,
in each case, as incorporated by reference into this announcement as follows:
Documents containing information incorporated by reference Where the document can be accessed by Shareholders
2021 Annual Report https://www.hammerson.com/sites/hammerson-corp/files/hammerson-corp/investors/results-reports/2022/annual-report-2021.pdf
(https://www.hammerson.com/sites/hammerson-corp/files/hammerson-corp/investors/results-reports/2022/annual-report-2021.pdf)
2022 Annual Report https://www.hammerson.com/sites/hammerson-corp/files/2023-04/hammerson-2022-annual-report.pdf
(https://www.hammerson.com/sites/hammerson-corp/files/2023-04/hammerson-2022-annual-report.pdf)
2023 Annual Report https://www.hammerson.com/sites/hammerson-corp/files/2024-03/240318-hammerson-annual-report-2023-web.pdf
(https://www.hammerson.com/sites/hammerson-corp/files/2024-03/240318-hammerson-annual-report-2023-web.pdf)
Information that is itself incorporated by reference into the above documents
is not incorporated by reference into this document. It should be noted that,
except as set forth above, no other portion of the above documents is
incorporated by reference into this document and those portions which are not
specifically incorporated by reference into this document are either not
relevant for Shareholders or the relevant information is included elsewhere in
this document.
Any statement contained in a document which is deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for the purpose
of this document to the extent that a statement contained herein (or in a
later document which is incorporated by reference herein) modifies or
supersedes such earlier statement (whether expressly, by implication or
otherwise). Any statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this document.
The contents of Hammerson's website or any hyperlinks accessible from it do
not form part of this document and investors should not rely on them.
There have been no additional related party transactions by the Company during
the period between 31 December 2023, being the date to which the last audited
financial results of the Company were prepared, and the date of this
announcement which are relevant to the Disposal save for cash distributions
received with respect to the Value Retail Group Interests of £13.6m.
1 (#_ftnref1) EV of €1,816m (see note 2), cash proceeds of €705m, based
on closing exchange rate of 1.179 (30.6.24)
2 (#_ftnref2) Based on enterprise value of £1,540m at share and FY23 EBITDA
of £64m
3 (#_ftnref3) By portfolio value as at 31 December 2024
4 (#_ftnref4) Based on last 5 year average of £20.3m and FY23 EPRA NTA of
£1,194m
5 (#_ftnref5) Based on last 5-year average of £20.3m distributions and cash
proceeds of £600m
(( 6 (#_ftnref6) )) Based on FY23 Hammerson GAV share of €2,399m adjusted
for participative loans
7 (#_ftnref7) Three-months average.
8 (#_ftnref8) FY23 cash pro forma for receipts from the disposals of Union
Square and O'Parinor
9 (#_ftnref9) Based on last three month average
10 (#_ftnref10) Unadjusted for participative loans.
11 (#_ftnref11) Hammerson 2023 published audited annual report and accounts
("ARA")
12 (#_ftnref12) Profit from operations (pg. 152 of 2023 ARA) adjusted for
tenant incentive amortisation
13 (#_ftnref13) Adjusted finance costs reflect net finance costs of £30.7m
(pg. 152 of 2023 ARA) less EPRA adjustments (pg. 142 of ARA) in relation to
the change in fair value of derivatives (£11.1m loss) and change in fair
value of participative loans (£9.1m gain)
14 (#_ftnref14) Average of £24.3m distributions received in 2019 (pg. 200
of 2019 ARA) and £73.6m in 2023 (pg. 188 of ARA)
15 (#_ftnref15) Sterling balances converted at £1:€1.179 (30 June 2024
exchange rate)
16 (#_ftnref16) Enterprise value includes the underlying assets and
liabilities associated with the participative loans which relate to the
Group's sponsor share of Value Retail's Spanish Villages (pg. 153 ARA)
aggregated with the Group's share of other assets and liabilities as per pg.
153 ARA
17 (#_ftnref17) Intercompany balances reflect "Distributions received in
advance from Value Retail" of €29.6m (£25.1m in pg. 156 ARA) less €2m
loan due from Value Retail (pg. 170 ARA) which are included in the Disposal
18 (#_ftnref18) Reflects the valuation at 31 December 2023 and 2023 EBITDA
in relation to Union Square which was sold in March 2024 for gross proceeds of
£111.0m
19 (#_ftnref19) Reflects the valuation at 31 December 2023 and 2023 EBITDA
in relation to ancillary units at O'Parinor which were sold in February 2024
for gross proceeds of £6.5m
20 (#_ftnref20) IFRS NAV of £1,115.0m plus EPRA NTA adjustments of £78.7m
(deferred tax of £100.7m less fair value of interest rate swaps of £22.0m as
per pg. 144 of ARA)
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