Final closure of the restructuring of Agasti
In the second quarter of 2016, the Agasti Group (in liquidation) (in the following sections "Agasti" is used), had a net income of NOK -187 million, bringing net income for the first half of the year to NOK -182 million. The corresponding figures for 2015 were NOK 8 million and NOK 25 million, respectively. The financial results are affected by a loss of NOK 199 million following the sale of Agasti's 66 per cent share in Obligo Holding AS and other assets to Audrey Management Holdings S.á.r.l., a company controlled by Blackstone L.P (Blackstone Real Estate Funds), which already owned the other 34 per cent of Obligo. The booked loss represents the difference between the book value and the consideration received for the assets sold.
Agasti's main source of income is its 66 per cent of net income after tax in the Obligo Group, adjusted for amortisations of intangible assets associated with its investment in the joint venture. Obligo generated operating revenues of NOK 90 million in the second quarter of 2016, while operating expenses totalled NOK 49 million. Operating income totalled NOK 42 million for the quarter, and Agasti’s 66 per cent share of the net income after tax amounted to NOK 20 million.
On 22 August 2016, Agasti’s general meeting resolved to sell the company’s 66 per cent ownership interest in Obligo and financial assets consisting of shares in unlisted funds managed by Obligo and a USD 2.5 million convertible loan. The purchaser is Blackstone Real Estate Funds. The agreed purchase price is NOK 215 million, to be paid in cash. This amount equates to NOK 0.73 per share in Agasti before transaction and liquidation costs. The transaction was completed 22 August 2016, and final settlement is expected to take place in September 2016.
Once the transaction was completed, Blackstone Real Estate Funds owns 100 per cent of Obligo, while Agasti no longer has any operations or assets other than the cash consideration received in connection with the transaction. On 22 August 2016, the general meeting also approved the board’s proposal to liquidate Agasti and subsequently delist the company from the Oslo Stock Exchange, after which the company's assets, including the purchase price, net of transaction costs and the company's operational costs until distribution, will be distributed to the company's shareholders. A preliminary calculation suggests that a payment of NOK 0.53 per share will be paid to Agasti's shareholder by the end of September and an additional payment of approximately NOK 0.17 will be paid by the end of October.
Since December 2015, Agasti has made payments to shareholders amounting to almost twice its share price at the time the company initiated a dialogue with interested international parties in December 2014. The 2015 transaction with Blackstone Real Estate Funds alone has directly generated payments to shareholders totalling NOK 1.14 per share, comprising sale dividends of NOK 0.76 per share in December 2015 and an ordinary dividend of NOK 0.38 per share in June 2016. Following Blackstone Real Estate Funds’ acquisition of the remaining 66 per cent of Obligo and other assets, Agasti will receive proceeds equivalent to NOK 0.73 per share before transaction and liquidation costs. During the restructuring process, Agasti has not only created shareholder value but also secured liquidity and exit opportunities for shareholders in Obligo managed funds in the form of payments totalling more than NOK 10 billion.
Looking forward, it is clear that Obligo’s assets under management and management revenues will decline sharply in 2016 and 2017. This will restrict the company’s dividend capacity in the years ahead, a development with clear implications for Agasti’s profits.
As the transaction was completed in the third quarter of 2016, Agasti will initiate liquidation proceedings. Final liquidation of the company is expected to be completed within six months. On 22 August 2016, the general meeting decided that the liquidation board should comprise Kathryn Moore Baker (board chair), Live Haukvik Aker and Olav Skjervheim.
A complete English version of the interim report is attached on www.newsweb.no and on Agasti's Investor Relations web pages www.agasti.no.
Chairman of the liquidation board – Kathryn Moore Baker, phone (+47) 905 44 557
Jørgen Pleym Ulvness, phone (+47) 906 67 877
This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.