Taking into account resolution of the General Shareholders Meeting (hereinafter may be referred as the Meeting) of INVL Baltic Real Estate (hereinafter may be referred as the Company) that was held on 9 April 2020 on repurchase of own shares of the Company due to material changes in the incorporation documents of the Company and taking into account that an obligation has arisen for the Company to buy back the shares of the Company of shareholders opposing the decisions or not participating in the meeting or abstaining from voting, on 25 June 2020 the Management Company INVL Asset Management, UAB (hereinafter may be referred as the Management company) provides an approved detailed procedure for the buy-back of the Company’s shares, according to which the buy-back of the Company’s shares shall be carried out.
The decision of the Board of the Management Company was adopted and the resolution regarding process of the Company‘s buy-back of shares has been made only after the following two conditions have been met: (i) an independent valuer of the Company's assets submitted a valuation of the Company's assets and (ii) the Company payed dividends to the Company's shareholders in accordance with Item 4 of the Meeting's agenda.
At the same time, it is announced that on 7 July 2020 share buy-back of the Company's shares begins and will last till 9 November 2020.
The share buy-back price per share is EUR 1.8526, according to NAV as of 30 April 2020.
The right to submit shares to the Company for share buy-back belongs to the Company's shareholders who:
1.1. at the Meeting voted against the new wording of the Articles of Association of the Company and/or
1.2. at the Meeting voted against the termination of the depository service agreement between the Company and AB SEB Bankas and the conclusion of a new depository service agreement with AB Šiaulių Bankas, or
1.3. at the Meeting abstained in voting on the Meeting agenda items which are envisaged in sections 4.1 and/or 4.2 of the Rules, or
1.4. did not participate in the Meeting.
All details regarding the share buy-back of shares are stated in the Company's share buy-back rules.
Additional information:
The real estate investment company INVL Baltic Real Estate’s management company, INVL Asset Management, has approved the procedure for a buy-back of shares. It will give shareholders who held its shares as of 2 April 2020 and did not participate in or did not approve the adoption of at least one of the decisions to increase INVL Baltic Real Estate’s maximum debt level and to change its depository an opportunity to sell their shares for the net asset value.
“This share buy-back is a formal part of the process to implement the changes, so selling shares in it isn’t compulsory. Moreover, the price of the stock on the exchange has recently been bigger than the net asset value, so in deciding, all the circumstances should be assessed. Our main goal is return earned for investors, so for those who believe in the outlook for INVL Baltic Real Estate, keeping the shares is also a good decision,” said Vytautas Bakšinskas, the real estate fund manager at INVL Asset Management, which manages INVL Baltic Real Estate. He said owners of a full 80.6% of the company’s shares supported the proposed decisions and thus will continue to hold their shares.
From the 2016 completion of a public share offering to the end of April 2020, the company has earned a high average annual return of nearly 21% for investors. “Also contributing to those gains was the successfully completed sale of the IBC Business Centre early this year; we paid out the funds received in that deal to shareholders as dividends. We believe the decisions on increasing the maximum debt level and the change of depository will allow us to make operations even more effective,” Mr Bakšinskas said.
Increasing the company’s maximum debt level to 80% of the value of its real estate is seen as providing a possibility of borrowing for bigger projects. “For our part, we will aim to continue keeping debt at a moderate level; it is currently 56%. It’s important to know that while there are currently no plans to increase the level of debt, if it were, the riskiness of the investment would rise. The change of depository will make it possible to reduce service fees and earn a bigger return on investment, since the company will be able to spend less on acquiring those legally compulsory services,” Mr Bakšinskas said.
Under the approved procedure for the buy-back of INVL Baltic Real Estate shares, the opportunity to sell the shares of INVL Baltic Real Estate they hold is available to shareholders of the company who did not participate in, abstained on or opposed the adoption of at least one of the decisions to increase the company’s maximum debt level and to change its depository. The decisions were adopted at the general shareholders meeting held on 9 April this year.
The stock buy-back will be conducted from 7 July to 9 November this year. The buy-back share price – INVL Baltic Real Estate’s net asset value as at 30 April this year – is EUR 1.8526 per share. Orders to sell in the buy-back can be submitted through financial brokerage departments at banks or financial brokerage firms. On 25 June, INVL Baltic Real Estate’s share price on the exchange was EUR 1.94.
INVL Baltic Real Estate manages real estate in Vilnius and Riga: office and commercial premises at the Vilnius Gates complex in the Lithuanian capital, office buildings in the Old Town on Vilniaus Street and in Šiaurės Miestelis, and the Dommo Business Park manufacturing, warehouse and office complex beside the Riga bypass. As of the end of March this year, the company’s properties had occupancy levels of between 69% and 100%.
As of 31 March 2020, INVL Baltic Real Estate property holdings had a total area of 33 900 sq. m. and a value of EUR 39 million. A full 71% of INVL Baltic Real Estate’s properties by asset value are in the central part of the city of Vilnius.
Since 22 December 2016, INVL Baltic Real Estate has operated as a closed-end investment company. Management of the company was assumed by INVL Asset Management, one of Lithuania’s leading asset management firms. The company will operate as a closed-end investment company until 2046, with extension possible for another 20 years.
The person authorized to provide additional information:
Real Estate Fund Manager of Management Company
Vytautas Bakšinskas
E-mail vytautas.baksinskas@invl.com
INVL Baltic Real Estate_rules for the buy-back of shares.pdf
