Starwood European Real Estate Finance Limited

(the “Company” or “SEREF”)

 

Loan Repayments, and Facility Cancellation and Second Capital Distribution

 

The Board of Starwood European Real Estate Finance Limited is pleased to announce considerable progress achieved including two loan repayments and the cancellation of the Company’s facility with Morgan Stanley and the Company’s second capital distribution of circa £30.0 million.

 

Loan Repayments

 

The Company is pleased to announce that two loans were repaid in full in July. These investments comprised, Hotels and Residential, UK - £49.9 million and Mixed Use, Dublin - €12.7m. As a result, the Company’s portfolio reduces from 17 to 15 investments.

 

Debt Facility Cancellation

 

SEREF has also cancelled the £76.0 million facility with Morgan Stanley. The only remaining facility is the Company’s modest £25.0 million facility with Lloyds which has been retained for working capital management.

 

Second Capital Distribution

 

In the Company’s 30 June portfolio update, the Board emphasized the need to build a cash reserve to cover unfunded loan commitments in the portfolio, now totaling £45.6 million (30 June 2023 - £47.3 million).

 

As a result of the recent debt facility cancellation and the need to retain a cash reserve for unfunded loan commitments, the Company has resolved to make a second capital distribution totaling (after expenses) circa £30.0 million to SEREF shareholders by way of a compulsory partial redemption of shares at a price of £1.0312 per share (being the last published NAV per share prior to this announcement) (the “Compulsory Redemption”). The amount applied to the Compulsory Redemption is after the deduction of costs and expenses which are expected to be circa £10,000.

 

Shareholder Information

 

The Compulsory Redemption will be affected pro rata to holdings on the share register as at the close of business on 25 August 2023 (the "Redemption Date"), being the record date for the Compulsory Redemption. Circa 7.54 per cent. of the Company’s issued share capital will be redeemed on the Redemption Date (the “Redemption Ratio”). Fractions of shares produced by the Redemption Ratio will not be redeemed, so the number of shares to be compulsorily redeemed from each shareholder will be rounded down to the nearest whole number of shares.

 

Payments of redemption monies are expected to be affected either through CREST (in the case of shares held in uncertificated form) or by cheque (in the case of shares held in certificated form) by 31 August 2023. Any certificates currently in circulation will be superseded by a new certificate which will be distributed to certificated shareholders by 31 August 2023.

 

The Company currently has 385,940,346 shares in issue. All of the shares redeemed on the Redemption Date will be cancelled and accordingly will thereafter be incapable of transfer by shareholders or reissue by the Company.

 

The shares will be disabled in CREST after close of business on the Redemption Date and the existing ISIN number, GG00BQWPBM39, (the "Old ISIN") will expire. The new ISIN number, GG00BPGJYV48, (the "New ISIN") in respect of the remaining shares which have not been compulsorily redeemed will be enabled and available for transactions from 8.00 a.m. on 29 August 2023. The share price TIDM, “SWEF.L”, will remain unchanged. For the period up to and including the Redemption Date, shares will be traded under the Old ISIN and as such, a purchaser of such shares may have a market claim for a proportion of the redemption proceeds following the activation of the New ISIN. CREST will automatically transfer any open transactions as at the Redemption Date to the New ISIN.

 

John Whittle Chairman of the Company commented:

“We are pleased to declare a second redemption distribution of circa £30.0 million to shareholders reflecting our objective to return capital to shareholders in a timely manner while managing the orderly wind down of the existing portfolio. The two further full loan repayments outlined today mark considerable further progress in meeting this objective as the Company’s outstanding investments reduce from 17 to 15.

SEREF has also simplified its own debt arrangements to preserve shareholder capital, cancelling the £76.0 million facility with Morgan Stanley while retaining the sole outstanding £25.0 million Lloyds facility for working capital management purposes. While we have prudently retained some capital to deploy against unfunded loan commitments, the total portfolio average life remains low and we look forward to updating shareholders on further loan repayments to fund additional capital distributions in due course.”

 

For further information, please contact:

 

Apex Fund and Corporate Services (Guernsey) Limited as Company Secretary

 

Duke Le Prevost

T: +44 (0) 203 5303 660

E: starwood@apexgroup.com

 

Notes: 

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 conduct an orderly realisation of the assets of the Company. www.starwoodeuropeanfinance.com

 

The Group's assets are managed by Starwood European Finance Partners Limited, an indirect wholly-owned subsidiary of the Starwood Capital Group.