Financing secured for key projects in transition period
The Management Board of REINO Capital S.A. (“Issuer,” “Company”) hereby discloses the following inside information on having secured material financing for preparatory works for the transactions to acquire operating businesses by the Issuer and assets by the Luxembourg-based fund REINO RF CEE Real Estate SCA-RAIF (“Fund”), as well as through a special-purpose vehicle with the participation of a strategic investor as part of the Issuer’s logistics platform Polish Logistics.
The funds will mainly be used to finance the Issuer’s expenses related to its own contribution to the investment vehicles as well as preparatory and transaction costs, especially the aforementioned entities and in connection with the aforementioned transactions. The planned transactions were disclosed by the Issuer in current reports 10/2020 of 31 January 2020, 11/2020 of 14 February 2020 and 16/2020 February 2020. Given the value of the on-going projects and transactions, the Issuer’s expenses in the period leading up to the expected major increase in revenue is substantial compared to the current scale.
A total of PLN 2.5 million, with interest on market terms, was raised in the form of loan agreements with Polish entities. The agreements were executed for a one-year period, with an early repayment option.
Collateral consists of a registered pledge on the shares of REINO Dywidenda Plus SA, a subsidiary of the Issuer.
Funding for work within the Fund were provided on the basis of a loan agreement with its general partner, i.e. by the Issuer as the company’s shareholder, for a period of up to 10 years, with interest on market terms. The loan may be repaid early at the lenders’ request. The maximum amount of the loan is EUR 900 000, of which EUR 450 000 is for the Issuer. As part of the first tranche, each of the general partner’s shareholders committed to contributing EUR 320 000. The loan can be repaid after the Fund carries out another equity issue under the Second Closing, as stipulated in the strategic partnership agreement disclosed by the Issuer in current report 34/2019 of 10 December 2019.
The financing being the subject of this report is a part of activities planned by the Issuer intended to raise capital in the transition period directly preceding the closing of key projects aimed at developing the Group within the real estate area and generating a major increase in operational scale.
The main source of financing for expenses related to the Issuer’s participation in the aforementioned investment structures and transactions will be funds to be raised via bond issues as part of a bond issue programme established in 2019 with a maximum value of EUR 10 million and within the series H share issue approved on 27 February 2020, as well as within target share capital.
The Issuer is not ruling out that capital raised from the aforementioned equity and/or debt issues will partly be used for the early repayment of the loans mentioned above, which are a liability in the period preceding the issuance, in a period that is optimal from the viewpoint of project scheduling and market conditions. Retaining the existing loan agreements and subsequently repaying them using proceeds generated by the Group from closing projects and from asset management services is an alternative solution.
Furthermore, as part of financing-related activities, the Issuer does not rule out obtaining further loans, which are viewed as a convenient and beneficial alternative to corporate bond issues and should be treated as such by the Shareholders.
Art. 17 sec. 1 MAR – inside information.