Starwood European Real Estate Finance Ltd (SWEF)
Starwood European Real Estate Finance Limited
Proposed Orderly Realisation and Return of Capital to Shareholders
Starwood European Real Estate Finance Limited announces that following a review of the Company’s strategy and advice sought from its advisers, the Board intends to recommend to shareholders that the investment objective and policy of the Company are amended such that the Board can pursue a strategy of orderly realisation and the return of capital over time to shareholders.
Under the Company’s current discount control mechanisms, the Company is required to redeem up to 75 per cent. of the shares in issue if the Company’s discount to its Net Asset Value per share is greater than 5 per cent. or more during the six-month period ending 31 December 2022 (the "Tender Offer"). The Board has determined that, following discussions with its larger shareholders, the likely take-up of a potential future Tender Offer would be significant and that the Company would no longer be of a viable size to provide shareholders with sufficient liquidity and scale. Accordingly, the Board has resolved that the Company should be placed into a managed wind-down with the aim of enabling shareholders to realise their entire holdings in the Company over time. It is expected that any managed wind-down would be on an orderly basis and will align to the repayment dates of the relevant loan positions.
In reaching this decision, the Board have considered a range of options and several factors including the prevailing and persistent discount to net asset value of the shares, feedback from shareholders, and the market capitalisation and liquidity of the shares.
The orderly realisation of the strategy will not result in the liquidation of the Company in the immediate future or require the Company to dispose of assets within a defined time frame. The proposed new strategy, if approved, would be implemented in a manner that would seek to maximise value to shareholders. It is intended that the Company’s listing would be maintained during the orderly realisation.
The Board intends, subject to the prior approval of the Financial Conduct Authority of the proposed amendments to the investment objective and policy, to publish a circular to shareholders to convene an extraordinary general meeting at which it will seek approval from shareholders to amend the Company’s investment objective and policy, the Articles of Incorporation (to the extent required) and approve any related matters necessary to facilitate an orderly realisation. It is the Board’s current intention to maintain the current target level of dividend, whilst the Company remains substantially invested, should the proposals be approved by shareholders (this is a target only and does not constitute a profit forecast).
The Board is available to discuss the proposed managed wind down with shareholders ahead of publishing a circular to shareholders.
This announcement contains inside information for the purposes of Article 7 of the UK version of the Market Abuse Regulation (EU) no.596/2014, which forms part of UK law by virtue of the European Union (Withdrawal) Act 2018 ("UK MAR").
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Starwood European Real Estate Finance Limited is an investment company listed on the main market of the London Stock Exchange with an investment objective to provide Shareholders with regular dividends and an attractive total return while limiting downside risk, through the origination, execution, acquisition and servicing of a diversified portfolio of real estate debt investments in the UK and the wider European Union's internal market. www.starwoodeuropeanfinance.com.
The Company is the largest London-listed vehicle to provide investors with pure play exposure to real estate lending.
The Group's assets are managed by Starwood European Finance Partners Limited, an indirect wholly-owned subsidiary of the Starwood Capital Group.
2.3. Major shareholding notifications
3.1. Additional regulated information required to be disclosed under the laws of a Member State
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