UPDC REIT is a close-ended property fund with underlying assets comprising a diversified portfolio of commercial and residential real estate assets in major cities across Nigeria.
The UPDC REIT unbundling Initiative:
- Another initiative, aimed at unlocking value for UPDC shareholders and enabling UPDC focus on core operations, is the proposed unbundling of a substantial portion of UPDC’s units in UPDC Real Estate Investment Trust (“UPDC REIT” or the “REIT”) (the “Unbundling”)
- Requisite regulatory approvals have been received and the Court-Ordered Meeting (“COM”) for shareholders to approve the Unbundling was held on 26 October 2020
The Unbundling will benefit UPDC shareholders:
- Direct exposure to the REIT and its diversified portfolio of income generating assets, ensuring that shareholders directly benefit from the dividend of the REIT
- The Unbundling is expected to materially increase the free float and liquidity in UPDC REIT units.
- Streamlined and focused operations for both UPDC and the UPDC REIT
- Provides UPDC with more operational and financial flexibility to embark on the next phase of growth and take advantage of emerging opportunities
The unbundling is to be implemented via a Scheme of Arrangement under Section 715 of CAMA incorporating a reduction in share capital under Section 131 of CAMA:
- UPDC REIT units will be allocated to all UPDC shareholders based on the respective shareholding in UPDC at the time of the unbundling
- UPDC will maintain a 5% holding in UPDC REIT to maintain its role as the REIT Sponsor
- UPDC’s share capital will be reduced by the value of the transferred units through the reduction of its share premium account
- The number of REIT units each Eligible Shareholder shall be entitled to receive will be calculated by multiplying the number of UPDC shares held by each Eligible Shareholder by the Allocation Ratio