| Tue 18 Jan 2011, 8:00 | | REI - Reinet Investments S.C.A. Depositary Receipts - Management statement for |
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REI
REI
REI - Reinet Investments S.C.A. Depositary Receipts - Management statement for
the third quarter ended 31 December 2010
Reinet Investments S.C.A. Depositary Receipts
issued by Reinet Securities SA
(Incorporated in Switzerland)
ISIN: CH0045793657
Depositary Receipt Code: REI
PRESS RELEASE FOR IMMEDIATE RELEASE
18 JANUARY 2011
MANAGEMENT STATEMENT FOR THE THIRD QUARTER ENDED 31 DECEMBER 2010
The Board of Reinet Investments Manager S.A. announces the results of Reinet
Investments S.C.A. for the third quarter ended 31 December 2010.
Key financial data
- Net asset value at 31 December 2010: EUR 2 823 million, an increase of 3
per cent from 30 September 2010
- Net asset value per ordinary share at 31 December 2010: EUR 14.41 (30
September 2010: EUR 13.97)
Consolidated Net Asset
Value (`NAV`)
31 December 2010 30 September 2010
EUR m % EUR m %
Listed investments
2 422 85.8 2 308 84.3
- British American
Tobacco p.l.c.
- Other 5 0.2 6 0.2
2 427 86.0 2 314 84.5
Cash and liquid funds 321 11.4 371 13.6
Unlisted investments
- Trilantic Capital 70 2.5 42 1.5
Partners funds
- US land development 32 1.1 26 0.9
and mortgages
- Vanterra Flex 9 0.3 6 0.2
Investments fund
- Vanterra C Change TEM 1 - - -
- Other 96 3.4 83 3.1
Fees payable and other (129) (4.6) (100) (3.7)
liabilities, net of other
assets
2 827 100.1 2 742 100.1
Minority interest (4) (0.1) (4) (0.1)
2 823 100.0 2 738 100.0
All of the underlying assets are held by Reinet Fund S.C.A., F.I.S. (`Reinet
Fund`).
Listed investment in British American Tobacco p.l.c. (`BAT`)
Reinet remains one of the largest shareholders in BAT, holding some 84 million
shares representing 4.2 per cent of BAT`s capital. At 31 December 2010, the
value of the investment in BAT in the balance sheet of Reinet was EUR 2 422
million, being 86 per cent of Reinet`s net asset value.
Reinet Fund`s NAV has been positively impacted by the increase in value in euro
terms of the BAT shares of EUR 114 million. BAT shares are listed principally on
the London Stock Exchange and are denominated in pounds sterling.
Cash and liquid funds
Reinet Fund`s cash is held on deposit with banks in Luxembourg and the United
Kingdom. In addition, Reinet Fund has invested EUR 269.5 million in a euro-
denominated government bond fund. This holds exclusively short-dated bonds
issued by western European governments and short-term loans backed by government
bonds.
Unlisted investments:
Trilantic Capital Partners
Reinet has invested both in the Trilantic management companies and as a partner
in the underlying funds. As at 31 December 2010, Reinet and its 20 per cent
minority partners in Trilantic had invested the equivalent of EUR 7.6 million in
the initial Trilantic management company investment, EUR 2.1 million to acquire
an interest in Trilantic Fund IV Europe and a further EUR 51 million in the
funds under Trilantic management. The investment in Trilantic is carried at the
estimated fair value of EUR 70 million at 31 December 2010, based on recent
valuations prepared by Trilantic. Of the 31 December 2010 valuation of EUR 70
million, some EUR 14 million is attributable to Reinet`s minority co-investors
in Trilantic, being shown as EUR 4 million in respect of minority interest and
EUR 10 million as liabilities in respect of funding provided by the minority
partners.
At 31 December 2010 Reinet Fund had remaining commitments of EUR 103 million,
being USD 69 million and EUR 51 million, to invest in these funds, after taking
into account the amounts payable by the minority partners.
United States land development and mortgages
Reinet has invested in real estate development projects and has acquired
mortgage debt at distressed prices from lenders. As at 31 December 2010, the
value of Reinet`s interest in property-related investments located mainly in
Florida and North and South Carolina was estimated to be EUR 32 million. This
was principally mortgage debt in respect of land held for future development.
The debts were acquired from local lenders at substantial discounts to nominal
value, reflecting the depressed economic situation in the United States and the
risk that the development companies may not be able to meet their obligations.
Alongside its partners, Reinet is committed to invest a further EUR 41 million
in total to acquire further mortgage debt and to fund development projects.
Reinet is working closely with its partners and co-investors in the United
States, who have considerable experience in managing such projects, recognising
that this is an area where industry knowledge is critical to making the right
investment decisions.
Vanterra Flex Investments L.P.
Reinet is a partner in both the Vanterra Flex Investments fund and in its
management company. In March 2010, Reinet entered into an agreement with
Vanterra Flex Investments L.P. (`Vanterra`), a newly created fund which was
established for the purpose of investing in other listed and unlisted funds and
direct investments in the United States and emerging markets. Vanterra will seek
to construct a globally diversified private equity portfolio providing investors
with long-term capital appreciation through private equity funds investments and
direct investments. As at 31 December 2010, the value of Reinet`s interest in
Vanterra was estimated to be EUR 9 million. Reinet is committed to invest a
further EUR 65 million in Vanterra Flex Investments.
Vanterra C Change Transformative Energy & Materials I, L.P. (`Vanterra C Change
TEM`)
Reinet is a partner in both the Vanterra C Change TEM fund and in its management
company. In July 2010, Reinet entered into an agreement with Vanterra C Change
TEM, a newly created fund which was established for the purpose of investing in
companies and projects providing products or services that supply cleaner
energy, create a more cost effective building environment through the use of
energy efficient technologies and sustainable materials and develop renewable
resources as a substitute for fossil and other traditional fuels to meet global
demand. As at 31 December 2010, capital contributions of EUR 1 million had been
made to the fund in respect of this commitment. Reinet is committed to invest a
further EUR 47 million in Vanterra C Change TEM.
Other unlisted investments
This portfolio includes small businesses with growth potential as well as
investments in specialised investment funds focused on developing markets and
niche sectors. The portfolio is valued at its fair value taking into account the
detailed evaluation performed at 30 September 2010 and movements in the quarter
to 31 December 2010.
Fees payable and other liabilities, net of other assets
Fees payable and other liabilities comprise principally a provision of EUR 100
million in respect of the potential performance fee payable after 31 March 2011,
together with the management fee payable of EUR 5 million, funding provided by
minority partners of EUR 18 million and other operating expenses currently
payable.
The performance fee is only payable if certain conditions are met. Specifically
the volume weighted average closing market price of the Company`s share on the
Luxembourg Stock Exchange over the last 20 trading days prior to 31 March 2011
must exceed EUR 7.1945. Whilst no performance fee is currently payable and no
fee will be payable if the market price would fall below EUR 7.1945, it is
considered prudent to make a pro rata provision at this time based on the latest
available share price information.
The management fee for the period under review amounted to EUR 6 million, of
which EUR 5 million remained payable at 31 December 2010.
Shares in issue
The number of shares in issue remained unchanged during the quarter at 195 942
286. This figure includes 1 000 management shares held by the General Partner.
Reinet Investments Manager S.A.
for and on behalf of Reinet Investments S.C.A.
18 January 2011
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Website: www.reinet.com
The information contained in this statement has not been audited
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. Reinet shares are listed on the
Luxembourg Stock Exchange and Reinet South African Depository Receipts are
listed in Johannesburg. Reinet shares are included in the `LuxX` index of the
principal shares traded on the Luxembourg exchange and the South African
Depository Receipts are included in the JSE `Top 40` Share Index.
Date: 18/01/2011 08:00:01 Produced by the JSE SENS Department.
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