Eurocastle 2019

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Izette
0
Eurocastle announces Realisation Plan to accelerate return of value from its assets
Publication of Circular and Notice of General Meeting to be held on 2 December 2019
Management Call to be held on 19 November 2019
Guernsey, 18 November 2019 – Eurocastle Investment Limited (“Eurocastle” or the “Company”) today announces that
the Board of Directors (the “Board”) has resolved to realise the majority of the Company’s assets, being its shares in
doValue S.p.A. (“doValue Shares”) and interests in Italian loan investments (the “NPL Portfolio”) in order to accelerate
the return of value to the Company’s shareholders by way of a tender offer (the “Realisation Plan”). Following completion
of the Tender Offer and the NPL Sale as described below, the Company is expected to have realised €281 million in
aggregate, equal to more than 90% of the Company’s Q3 2019 net asset value (“NAV”)i
.
As previously communicated, Eurocastle and the Board have been focused on enhancing shareholder value and maximizing
distributions to shareholders. Through a number of strategies, including the adoption of a distribution policy and a series of
accretive tender offers, the Company has distributed €544 million to shareholders over the past 6 years, with a remaining
Q3 2019 NAV of approximately €308 millioni
. In light of the discount at which the Company continues to trade relative to
its NAV, the Board has determined that this is an appropriate time to set new strategic priorities for the Company to realise
the value of its assets for shareholders.
Eurocastle has today published a circular to shareholders (the “Circular”) containing details of the Realisation Plan and the
actions required to be taken by shareholders to implement the Proposed NPL Sale and the Tender Offer. The Circular
contains notice of the general meeting of the Company’s shareholders (the “General Meeting”) to be held on 2 December
2019 to seek shareholder approval on two resolutions. The first resolution (the “NPL Sale Resolution”) will seek
shareholder approval, as an ordinary resolution, for a transaction pursuant to which the Company would dispose of the NPL
Portfolio for a purchase price of €140.2 million to funds managed by an affiliate of FIG LLC, the Company’s Investment
Manager (the “NPL Sale”). The second resolution will seek shareholder approval, as a special resolution, for a tender offer
whereby the Company will offer to exchange Eurocastle shares for a combination of doValue Shares and the distributable
cash proceeds from the NPL Sale (the “Tender Offer”). The General Meeting will be held at Regency Court, Glategny
Esplanade, St Peter Port, Guernsey GY1 1WW on 2 December 2019 at 3.00 p.m. (GMT).
Under the terms of the Tender Offer, the maximum number of Ordinary Shares to be tendered is 34.6 million (the
“Maximum Number of Shares”). Assuming the Maximum Number of Shares are tendered, tendering shareholders will
receive both approximately 0.4353 doValue Shares and €3.16 in cash in exchange for each Eurocastle share validly
tendered. This initial ratio will be adjusted in the manner set out in the Circular if fewer than the Maximum Number of
Shares are validly tendered. The Tender Offer will return 15.04 million doValue Shares and up to €109.2 million in cash to
shareholders.
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The consideration per Ordinary Share, which is equivalent to a value of €8.14, has been determined by the Board based on
its calculation of the Company’s currently distributable NAV, which reflects: (i) the volume weighted average price of
doValue S.p.A. for the 5 days ended 15 November 2019ii (the “VWAP”), being €11.44 per doValue Share; (ii) the
estimated net proceeds from the Proposed NPL Sale of €140.2 million; (iii) the carrying value of the remaining assets of the
Company as at 30 September 2019; and (iv) additional reserves determined by the Board of Directors in order to take into
account future costs and potential liabilities.
Izette
0
The Board does not currently intend to make any material new investments with the proceeds realised from the Company’s
existing holdings. With respect to the remaining assets, which predominantly comprise Eurocastle’s investments in Italian
real estate funds, the Company plans to continue to hold and realise these assets in accordance with existing business plans.
It will support these investments to the extent required to optimise returns and distribute cash to shareholders when
available. The Company’s distribution policy, including the regular quarterly dividend, will not apply with effect from Q3
2019. The Board currently anticipates that the majority of the Company’s existing assets will be realised by the end of
2023.
FIG LLC, the Company’s Investment Manager, has also agreed to amend the calculation of its incentive fee to treat the
Company’s other remaining assets, which predominantly comprise investments in Italian real estate funds, as fully realised
at an agreed value in 2019 and to better reflect the price per Ordinary Share represented in the initial Exchange Ratio.
These amendments will reduce the fee payable by the Company to the Investment Manager in the fourth quarter of 2019 by
up to €2.4 million to €19.7 million and no further fees will be due in relation to the Company’s remaining investments. In
return, the Investment Manager will be entitled to earn back a portion of this discount if amounts are released from certain
reserves put in place by the Board to fund future costs and potential liabilities.
EJF Debt Opportunities Master Fund, L.P., Asset Value Investors, and EMS EC Investments LP, for themselves and their
affiliates, whose aggregate voting rights in the Company represented approximately 62% of the total voting rights in the
Company as at 15 November 2019 (the “Major Shareholders”), have provided the Company with letters containing
confirmations of their firm intentions to vote in favour of the resolutions at the General Meeting and tender all of their
Ordinary Shares as part of the Tender Offer.
The Investment Manager, on behalf of itself, its principals and managed funds, whose aggregate voting rights in the
Company represented approximately 14% of the total voting rights in the Company as at 15 November 2019, has provided
the Company with a letter containing confirmations of (i) each of the Investment Manager, its principals and managed
funds’ firm intention to vote in favour of the Tender Offer at the General Meeting and tender all of their Ordinary Shares as
part of the Tender Offer; and (ii) the Investment Manager’s commitment not to vote on the NPL Sale Resolution, and to
take all reasonable steps to ensure that members of its group and employees will not vote on the NPL Sale Resolution to be
proposed at the General Meeting.
In addition, the Major Shareholders and the Investment Manager, on behalf of itself, its principals and managed funds, have
agreed to restrictions on their ability to dispose of any doValue Shares acquired through the Tender Offer prior to January
31, 2020 and such restrictions will then expire in stages up to March 31, 2020. Please refer to the Circular for more details
of these restrictions. Certain other affiliates and employees of the Investment Manager may participate in the Tender Offer
on the same terms as all other shareholders.
Shareholders should refer to the sections of the Circular entitled “Action to be Taken in Relation to the Proposed NPL
Sale” and “Action to be Taken in Relation to the Tender Offer” for action to be taken in respect of the Proposed NPL Sale
and the Tender Offer.
NPL Sale Details
The NPL Sale is conditional on approval by Shareholders at the General Meeting
Since the establishment of the change in strategy in 2013, Eurocastle has invested €289 million in 24 Italian loan pools.
These investments have returned €237 million to date, helping to support the Company’s regular quarterly dividend, and
have a remaining value as at 30 September 2019 of €149 million. The Board has been evaluating options of how to
accelerate the return of this remaining value to shareholders. After carefully considering the possibility of running a
marketed process with third parties and the associated timing, cost and execution risk in light of the complexity and size of
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the Company’s portfolio, the Board approached the Investment Manager to gauge the interest of any of its affiliated funds,
certain of which already held interests in the NPL Portfolio, to acquire these interests in a single accelerated transaction.
The Company has now reached agreement to sell the NPL Portfolio for a purchase price (after customary adjustments for
collections) of €140.2 million to funds managed by an affiliate of its Investment Manager (the “NPL Purchaser”). The
purchase price represents a 5% discount to the Q3 2019 NAV of the NPL Portfolio excluding certain residual interests
which the Company is required to retain due to legal obligations and which the NPL Purchaser has committed to acquire at
the same 5% discount when such obligations no longer apply. In addition, the NPL Purchaser will assume an obligation to
fund the €18.1 million deferred purchase price due to be paid by the Company in July 2020 in relation to the FINO NPL
investment. Therefore, the Company anticipates receiving cash proceeds of approximately €122.1 million upon completion
of the Proposed NPL Sale in December 2019.
Izette
0
It is intended that the distributable cash proceeds realised by the Company from the Proposed NPL Sale (representing the
cash proceeds to be received by the Company in December 2019 less transaction costs and certain additional amounts to be
retained by the Company to cover future costs and potential liabilities) of €109.2 million will be returned to shareholders
via the cash component of the Tender Offer consideration.
As the NPL Sale is a related party transaction between the Company and the NPL Purchaser, a committee comprising the
four members of the Board who are not affiliated with the Investment Manager (the “Board Committee”) obtained an
independent valuation of the NPL Portfolio from Alantra Corporate Portfolio Advisors, S.L. and are of the unanimous view
that the terms of the NPL Sale are fair and reasonable so far as Eurocastle’s shareholders are concerned and that it has been
entered into on arms’ length terms.
In particular, the Board Committee believes that the proposed sale to the NPL Purchaser represents an attractive
opportunity for shareholders as it provides transaction certainty, speed of execution and a clean exit with no requirement to
reserve for tail liability risk at a limited discount to the investments’ carrying value, an outcome which the Board
Committee believes would not be achieved through a marketed process. Execution of the Proposed NPL Sale will allow the
Company to return the value of the NPL Portfolio to Shareholders in a timely fashion, primarily via the cash component of
the Tender Offer consideration.
Tender Offer Details
The Tender Offer is conditional on both the Tender Offer Resolution and the NPL Sale Resolution being approved by
Shareholders at the General Meeting
The Board is proposing to deliver both: (i) up to 15.04 million doValue Shares currently held by the Company; and (ii) up
to €109.2 million in cash, through the acquisition of up to 34.6 million Eurocastle shares from tendering shareholders via an
off-market share buy-back process in exchange for the delivery of cash and doValue Shares. Assuming the Maximum
Number of Shares are tendered, tendering shareholders will receive both approximately 0.4353 doValue Shares and €3.16
in cash in exchange for each Eurocastle share validly tendered, representing a value per Ordinary Share of €8.14.
The consideration per Ordinary Share has been determined by the Board based on its calculation of the Company’s
currently distributable NAV, which reflects: (i) the VWAP of doValue; (ii) the estimated net proceeds from the Proposed
NPL Sale; (iii) the NAV of the remaining assets of the Company as at 30 September 2019; and (iv) additional reserves
determined by the Board of Directors in order to take into account future costs and potential liabilities.
Each tendering shareholder will be entitled to have 94.91 per cent. of the Ordinary Shares registered in their respective
names on the Tender Offer record date, on 17 December 2019, accepted into the Tender Offer, rounded down to the nearest
whole number of Ordinary Shares. This is what is known as each tendering shareholder’s “Basic Entitlement”. All
Ordinary Shares validly tendered by tendering shareholders up to their respective Basic Entitlement will be accepted in full
in exchange for doValue Shares and cash. Shareholders may also be able to participate in the Tender Offer in excess of
their Basic Entitlement to the extent that other tendering shareholders tender less than their respective Basic Entitlements.
For further details see the Tender Offer Circular.
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The Circular, which includes notice of the General Meeting, has been posted on the Investor Relations section of the
Company’s website under the tab “Periodic Reports and Shareholder Communications – Tender Offer” and has been
mailed to eligible shareholders on the register as at close of business on 15 November 2019.
EXPECTED TIMETABLE FOR PROPOSED NPL SALE AND TENDER OFFER
2019
Date of publication of Circular and Tender Offer opens 18 November
Latest time and date for receipt of Forms of Proxy or CREST
Proxy Instructions (as applicable) to be provided in respect of
the General Meeting…………….………………………………. 3.00 p.m. (GMT) on 28 November
General Meeting to approve NPL Sale Resolution and
Tender Offer Resolution………......…………………...………
3.00 p.m. (GMT) on 2 December
Latest time and date for receipt of Tender Forms in respect
of the Tender Offer………………………………………..…... 6.00 p.m. (CET) on 17 December
Tender Offer Record Date and Tender Offer Closing Date…..… 6.00 p.m. (CET) on 17 December
Commencement of: (i) delivery of doValue Shares via Monte
Titoli to Admitted Institutions, CREST Participants and holders
of successfully tendered certificated Ordinary Shares; (ii)
settlement of Cash Component of Tender Offer consideration;
(iii) settlement of fractional entitlements and (iv) despatch of
balance share certificates for unsuccessful tenders of Ordinary
Shares (certificated holders only) ................................................
20 December
The above times and/or dates may be subject to change and, in the event of such change, the revised times and/or dates
will be notified to Shareholders by a press release on the Company’s website, an announcement through a Regulatory
Information Service and via newswire in the United States.
In addition, management will host a conference call at 2:00 P.M. London time (9:00 A.M. New York time) on Tuesday, 19
November 2019. All interested parties are welcome to participate on the live call. You can access the conference call by
dialing first +1-844-492-7988 (from within the U.S.) or +1-478-219-0293 (from outside of the U.S.) ten minutes prior to
the scheduled start of the call; please reference “Eurocastle Management Call or conference ID number 2437329”
A webcast of the conference call will be available to the public on a listen-only basis at www.eurocastleinv.com. Please
allow extra time prior to the call to visit the site and download the necessary software required to listen to the internet
broadcast. A replay of the webcast will be available for three months following the call.
For those who are not available to listen to the live call, a replay will be available until 11:59 P.M. New York time on
Monday, 2 December 2019 by dialing +1-855-859-2056 (from within the U.S.) or +1-404-537-3406 (from outside of the
U.S.); please reference access code “2437329”
DeZwarteRidder
0
quote:

Cosy schreef op 18 november 2019 10:02:


Kan je het even samenvatten, Izette?

Ze gaan spullen verkopen en aandelen terugkopen in ruil voor cash en aandelen Dovalue.
A3aan
0
Het blijft een verrassing als je de aandelen Eurocastle bezit. Een heel verhaal en zal wel weer zien hoe het één en ander verloopt. Maar begrijp nu wel dat mijn Eurocastle aandelen verdwijnen voor geld een Italiaanse rommel (???) en of ik in Italiaanse spul wil zitten moet ik nog eens goed over nadenken. Als er nog een paar duppies bijkomen de komende week ruim ik ze denk ik maar op.
DeZwarteRidder
0
quote:

A3aan schreef op 18 november 2019 11:27:


Het blijft een verrassing als je de aandelen Eurocastle bezit. Een heel verhaal en zal wel weer zien hoe het één en ander verloopt. Maar begrijp nu wel dat mijn Eurocastle aandelen verdwijnen voor geld een Italiaanse rommel (???) en of ik in Italiaanse spul wil zitten moet ik nog eens goed over nadenken. Als er nog een paar duppies bijkomen de komende week ruim ik ze denk ik maar op.

DoValue is een Italiaans incassoburo, met beursnotering.
DeZwarteRidder
0
doValue to manage 4.3 billion euros of Alpha Bank's bad loans in Cyprus By Reuters - Oct 14, 2019

MILAN (Reuters) - Italy's biggest loan recovery specialist doValue (MI:DOVA) said on Monday it had agreed with Greece's Alpha Bank (AT:ACBr) to manage a gross 4.3 billion euro's......
GrindNshiP
0
quote:

A3aan schreef op 18 november 2019 11:27:


Het blijft een verrassing als je de aandelen Eurocastle bezit. Een heel verhaal en zal wel weer zien hoe het één en ander verloopt. Maar begrijp nu wel dat mijn Eurocastle aandelen verdwijnen voor geld een Italiaanse rommel (???) en of ik in Italiaanse spul wil zitten moet ik nog eens goed over nadenken. Als er nog een paar duppies bijkomen de komende week ruim ik ze denk ik maar op.


Daar zat je al lang in via Eurocastle en hun aandelenpositie in DoValue (voorheen DoBank). DoValue heeft een goed kwartaal gedraaid en maakt gewoon winst en maken goede efficiency slagen waarbij ze tevens aangeven dat het innen van achterstanden zeer voorspoedig gaat. Voordeel van deze tender is dat je nu eindelijk meer je NAV eruit gaat halen en je hele positie in aanmerking komt ipv weer een aandeleninkoop met cash. Je kunt daarna altijd je aandelen DoValue verkopen. Op huidige koers kom je dan uit op c.a. 6% premie.
shaai
0
quote:

A3aan schreef op 18 november 2019 11:27:


Het blijft een verrassing als je de aandelen Eurocastle bezit. Een heel verhaal en zal wel weer zien hoe het één en ander verloopt. Maar begrijp nu wel dat mijn Eurocastle aandelen verdwijnen voor geld een Italiaanse rommel (???) en of ik in Italiaanse spul wil zitten moet ik nog eens goed over nadenken. Als er nog een paar duppies bijkomen de komende week ruim ik ze denk ik maar op.


je zit met EuroCastle al heel lang in DoBank?
Cosy
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Ik heb er maar 300, dus zo veel risico loop ik niet en zit bovendien al op een goede winst.
Maar toch ben ik altijd wat achterdochtig over dit bedrijf. Buikgevoel.
Ik denk aan verkoop.
torro
0
quote:

shaai schreef op 18 november 2019 14:48:


[...]

je zit met EuroCastle al heel lang in DoBank?
nog steeds een leuk dividend Adriaan
DeZwarteRidder
0
Het lijkt erop dat ze Eurocastle van de beurs willen halen; waarschijnlijk is dat zeer winstgevend voor de beheerders, want anders zouden ze dat niet doen.

Het lijkt er ook op dat het dividend geschrapt wordt of verlaagd.
GrindNshiP
0
quote:

DeZwarteRidder schreef op 18 november 2019 15:18:


Het lijkt erop dat ze Eurocastle van de beurs willen halen; waarschijnlijk is dat zeer winstgevend voor de beheerders, want anders zouden ze dat niet doen.

Het lijkt er ook op dat het dividend geschrapt wordt of verlaagd.


Vooralsnog geschrapt: "The Company’s Distribution Policy, including the regular quarterly dividend, will not apply with effect from Q3 2019."

Logischerwijs vanuit de gedachte dat de tender het dividend vervangt (beetje vergelijkbaar met bod op Atrium t.o.v. kwartaaldividend).
effegenoeg
0
Eerst maar es afwachten wat er uit zal komen op 2 dec.
We zullen er niet slechter van worden is mijn inschatting.
Hoewel ik al genoeg financiële waarden in de portefeuille heb moet ik zeggen.
shaai
0
quote:

torro schreef op 18 november 2019 15:14:


[...]nog steeds een leuk dividend Adriaan


ehhh??
Bassie??
Boef B?
shaai
0
quote:

DeZwarteRidder schreef op 18 november 2019 15:18:


Het lijkt erop dat ze Eurocastle van de beurs willen halen; waarschijnlijk is dat zeer winstgevend voor de beheerders, want anders zouden ze dat niet doen.

Het lijkt er ook op dat het dividend geschrapt wordt of verlaagd.


ik denk gewoon versnelling van het bestaande realisatie traject, waar ze al lang mee bezig zijn. Volgens mij zeiden ze tijden terug al dat hun grote klanten cash willen zien ipv voortzetten Eurocastle, en ligt dit in het verlengde daarvan
A3aan
0
quote:

torro schreef op 18 november 2019 15:14:


[...]nog steeds een leuk dividend Adriaan


Dag Torro, ik heb ze inderdaad nog steeds. Alles goed mij jou?
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