COMPANY ANNOUNCEMENT FOR IMMEDIATE RELEASE
23 DECEMBER 2019
REINET INVESTMENTS PROPOSES REVISIONS TO THE TERMS OF THE PROSPECTUS
The Board of Reinet Investment Manager S.A., acting on behalf of Reinet Investments S.C.A. (‘the Company’) proposes to convene an extraordinary meeting of shareholders to consider revisions to the prospectus (the ‘Prospectus’) of its wholly-owned subsidiary, Reinet Fund S.C.A. F.I.S. (the ‘Fund’), which were originally described in the prospectus of the Company issued at the time of the reorganisation of the Company and the listing of its shares in 2008 and subsequently amended in 2012 with the approval of a general meeting of shareholders of the Company.
Reinet Fund Manager S.A. (the ‘Fund Manager’) manages a diversified portfolio of investments allowing for an emphasis on several key investments which the Fund Manager believes may add substantial value. The proportion of the Fund’s assets represented by such key investments may be substantially higher than that of the other investments in the Fund’s portfolio.
It is proposed that the Prospectus is amended to allow an investment in such a key asset of up to 50 per cent of the Fund’s total assets with all other assets remaining below 30 per cent of total assets. If the limits are exceeded as a result of market movements, adjustments to the portfolio will only be made when considered to be in the interest of the Fund and its shareholders.
Commenting on the rationale for this proposed amendment, Johann Rupert, Chairman of the Company, said:
As communicated previously, Reinet remains focused on pursuing the planned diversification of the Fund’s investment portfolio; its investment in British American Tobacco p.l.c. (‘BAT’) has provided the Fund with the capacity to fund new opportunities, either through borrowing or through the realisation of part of the shareholding. As at 30 September 2019 the Fund had sold over 16 million BAT shares for total proceeds of some € 720 million and made new investments of some € 2.4 billion in pursuit of further diversification of the Fund.
Whilst the Fund has significantly expanded its portfolio of new investments, the Fund Manager believes that the existence of certain key investments will remain a feature of the portfolio and is considered the most optimal way of creating value for the Fund’s shareholders.
Our philosophy is to find and invest in assets that offer long-term growth potential. We therefore invest to deliver strong returns over the long term, rather than to deploy short-term investment strategies designed to generate short-term results. However, we are currently limited – due to risk diversification requirements - in our efforts to develop certain key investments that have the potential to achieve long term growth. An additional contribution of capital in certain key investments (other than BAT) could, over time, increase the Fund’s current exposure to an investment beyond the 30 per cent threshold. This possibility has been discussed with the CSSF, the Fund’s regulator, and has subsequently been approved.
Whilst on the one hand now placing a limit on the overall exposure of a single investment, in obtaining shareholder approval for the amendment to the Prospectus, Reinet will have more flexibility over time to manage the size of and further investment in key investments, which will be in the long term interest of the Reinet shareholders.
On a separate point, the Prospectus restricts investments in illiquid securities to no more than 50 per cent of the net assets of the Fund. It is proposed to delete this restriction, as liquidity constraints are not directly relevant for the Fund, it being closed ended and investing for the long term, such that it does not have regular and unpredictable redemption obligations towards its shareholder, also noting that the Fund's shareholder is the listed and regulated securitisation vehicle Reinet Investments S.C.A. which has its ordinary shares listed and traded on three regulated stock exchanges.
Upon shareholder approval, the investment guidelines and the investment objective and policy which were originally described in the prospectus of the Company and subsequently amended in 2012 will automatically be updated and the Fund will submit its amended prospectus for approval to the Commission de Surveillance du Secteur Financier, the Luxembourg financial services regulator.
It is anticipated that the shareholders’ meeting will be held on 24 January 2020 to consider the revisions to the Prospectus.
Reinet Investments Manager S.A.
for and on behalf of Reinet Investments S.C.A.
Reinet Investments S.C.A. (the ‘Company’) is a partnership limited by shares incorporated in the Grand Duchy of Luxembourg and having its registered office at 35, boulevard Prince Henri, L-1724 Luxembourg. It is governed by the Luxembourg law on Securitisation and in this capacity allows its shareholders to participate indirectly in the portfolio of assets held by its wholly-owned subsidiary Reinet Fund S.C.A., F.I.S. (‘the Fund’), a specialised investment fund also incorporated in Luxembourg. The Company’s ordinary shares are listed on the Luxembourg Stock Exchange, Euronext Amsterdam and the Johannesburg Stock Exchange, the listing on the Johannesburg Stock Exchange is a secondary listing. The Company’s ordinary shares are included in the 'LuxX' index of the principal shares traded on the Luxembourg Stock Exchange. The Company and the Fund together with the Fund’s subsidiaries are referred to as ‘Reinet’.
Cautionary statement regarding forward-looking statements
This document contains forward-looking statements which reflect the current views and beliefs of the Board, as well as assumptions made by them and information currently available to them. Words such as ‘may’, ‘should’, ‘estimate’, ‘project’, ‘plan’, ‘believe’, ‘expect’, ‘anticipate’, ‘intend’, ‘potential’, ‘goal’, ‘strategy’, ‘target’, ‘will’, ‘seek’ and similar expressions may identify forward-looking statements. Such forward-looking statements are not guarantees of future performance. Actual results may differ materially from the forwardlooking statements as a result of a number of risks and uncertainties, many of which are outside Reinet’s control. The Company does not undertake to update, nor does it have any obligation to provide updates or to revise, any forward-looking statements.
Reinet Investments S.C.A.
R.C.S. Luxembourg B 16.576
Legal Entity Identifier : 222100830RQTFVV22S80
Registered office: 35, boulevard Prince Henri, L-1724 Luxembourg, Tel. (+352) 22 42 10, Fax (+352) 22 72 53