| Tue 19 Jul 2011, 7:30 | | 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 first quarter ended 30 June 2011
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
19 JULY 2011
The Board of Reinet Investments Manager S.A. announces the results of Reinet
Investments S.C.A. for the first quarter ended 30 June 2011.
Key financial data
Net asset value at 30 June 2011: EUR 2 995 million, an increase of 8 per cent
from 31 March 2011
Net asset value per ordinary share at 30 June 2011: EUR 15.28 (31 March 2011:
EUR 14.21)
Consolidated Net Asset Value Unaudited Audited
(`NAV`)
30 June 2011 31 March 2011
EUR m % EUR m %
Listed investments
2 547 85.0 2 387 85.7
- British American Tobacco
p.l.c.
- Other 5 0.2 7 0.2
2 552 85.2 2 394 85.9
Cash and liquid funds 153 5.1 236 8.5
Unlisted investments
- Trilantic Capital Partners 81 2.7 72 2.6
funds
- US land development and 57 1.9 53 1.9
mortgages
- Vanterra Flex Investments 14 0.5 13 0.5
fund
- Vanterra C Change TEM fund 20 0.6 10 0.4
- Jagersfontein 57 1.9 49 1.8
- 36 South Investment fund 83 2.8 88 3.2
- Other 65 2.2 42 1.5
377 12.6 327 11.9
Funding by minority partners (24) (0.8) (21) (0.8)
Borrowings (46) (1.5) (46) (1.7)
Fees payable and other (13) (0.5) (102) (3.7)
liabilities, net of other
assets
2 999 100.1 2 788 100.1
Minority interest (4) (0.1) (4) (0.1)
2 995 100.0 2 784 100.0
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 30 June 2011, the value of
the investment in BAT in the balance sheet of Reinet was EUR 2 547 million,
being 85 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 160 million during the quarter. BAT shares are
listed principally on the London Stock Exchange and are denominated in pounds
sterling.
Reinet received a dividend from BAT during the quarter amounting to EUR 77
million.
Cash and liquid funds
Reinet Fund`s cash is held on deposit with banks in Luxembourg. In addition,
Reinet Fund has invested EUR 86 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 30 June 2011, 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 59 million, net of
capital repayments, in the funds under Trilantic management. The investment in
Trilantic is carried at the estimated fair value of EUR 81 million at 30 June
2011, based on recent valuations prepared by Trilantic. Of the 30 June 2011
valuation of EUR 81 million, some EUR 16 million is attributable to Reinet`s
minority co-investors in Trilantic, being shown as EUR 4 million in respect of
minority interest and EUR 12 million as liabilities in respect of funding
provided by the minority partners.
At 30 June 2011 Reinet Fund had remaining commitments of EUR 91 million to
invest in these funds, after taking into account the amounts payable by the
minority partners.
United States land development and mortgages
Recognising the depressed state of the property market in the United States,
Reinet has co-invested with partners in acquiring real estate development
projects - usually properties where infrastructure services have been laid but
where construction of properties has not yet commenced - and mortgage debt on
such developments and undeveloped sites. The investments are principally in
Florida and the North and South Carolinas with one investment in Colorado.
The mortgage debts were acquired from local lenders at substantial discounts to
nominal value, reflecting the economic situation and the risk that the
development companies may not be able to meet their obligations. 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. At 30 June 2011, Reinet had invested a total of USD 70 million (EUR
48 million) in these projects. At that date, these were valued at EUR 57
million of which EUR 46 million is attributable to Reinet and EUR 11 million to
its partners.
Reinet is committed to invest a further USD 30 million (EUR 21 million) to
acquire further mortgage debt and to fund development projects.
Vanterra Flex Investments L.P.
Reinet is an investor in Vanterra and in its general partner.
Vanterra was established in March 2010 to invest in listed and unlisted funds
and to make direct investments in the United States and emerging markets.
Vanterra has invested alongside Reinet in Trilantic and in the United States
land development and mortgages. It is also an investor in Vanterra C Change
Transformative Energy & Materials I, L.P. Vanterra will seek to construct a
globally diversified private equity portfolio providing investors with long-term
capital appreciation.
As at 30 June 2011, USD 21 million (EUR 14 million) of committed funds plus an
additional USD 1 million (EUR 1 million) in respect of expenses had been
invested in the fund. Reinet is committed to invest a further USD 79 million
(EUR 55 million) in Vanterra.
Vanterra C Change Transformative Energy & Materials I, L.P. (`TEM`)
Reinet is an investor in TEM and in its general partner.
In July 2010, Reinet entered into an agreement to invest in TEM. TEM is a newly
created fund, established to invest 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 develop
renewable resources as a substitute for fossil and other traditional fuels.
As at 30 June 2011, capital contributions of USD 31 million (EUR 21 million) had
been made to the fund. Reinet is committed to invest a further USD 34 million
(EUR 23 million) in TEM.
Jagersfontein
Reinet is a co-investor along with specialist operators and the local community
in a project which will seek to process and extract diamonds from the waste
tailings from mining operations carried out over a century ago. The tailings
are located at Jagersfontein in South Africa. Significant developments in terms
of gemstone extraction since the mines were first excavated mean that there is
now the potential to recover stones which were previously treated as waste.
As at 30 June 2011, Reinet had provided loans of some ZAR 528 million to finance
the acquisition of the tailings and plant to process the tailings. Once the
final investment holding structure has been determined, it is anticipated that
Reinet will have an equity interest of 44 per cent in the venture. This rand
exposure has been hedged by local currency borrowings. Extraction operations
are expected to begin in the third quarter of 2011.
36 South global macro/volatility funds
Reinet has co-invested with the 36 South management team in the fund management
and distribution companies. It is also an investor in the funds under
management. These funds are established through an Irish-registered investment
fund - 36 South Funds PLC.
36 South is an absolute return fund manager which specialises in managing global
macro/volatility funds. The fund management philosophy is to invest when market
estimates of volatility are mis-priced. The volatility may apply to a wide
range of underlying asset classes ranging from currencies and interest rates to
equities.
In March 2011, Reinet invested its full commitment of EUR 88 million in 36
South. Of this, EUR 15 million represented the initial investment in and loans
to the jointly-held fund management activities; the balance of EUR 73 million
being Reinet`s investment in the funds under management. The investment in 36
South Funds PLC is carried at its fair value of EUR 68 million at 30 June 2011.
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 31 March 2011 and movements in the quarter to
30 June 2011.
Fees payable and other liabilities, net of other assets
Fees payable and other liabilities comprise principally a provision of EUR 4
million in respect of the proportionate potential performance fee payable after
31 March 2012, together with the management fee payable of EUR 5 million, tax
provision of EUR 3 million and other operating expenses currently payable.
The management fee for the period under review amounted to EUR 6 million, of
which EUR 5 million remained payable at 30 June 2011.
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.
19 July 2011
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.
19 July 2011
Sponsor
RAND MERCHANT BANK (a division of FirstRand Bank Limited)
Date: 19/07/2011 07:30:01 Produced by the JSE SENS Department.
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