Annual Information Update

This annual information updated is required by, and is being made pursuant to, Article 10 of the Prospectus Directive as implemented in the United Kingdom (Prospectus Rule 5.2) and not for any other purpose and neither the Company, nor any other person, takes any responsibility for, or makes any representation, express or implied, as to the accuracy or completeness of, the information which it contains. In accordance with Article 27.3 of the Prospective Directive, it is acknowledged that whilst the information referred to below was up to date at the time of its publication, such disclosures may at any time become out of date due to changing circumstances.

1. Regulatory Information Service (‘RIS’) announcements

2009

2010

All of the information listed above is available for viewing on the London Stock Exchange RNS website.

Annual Report for the 14 months ended 28 February 2010

REO Securities is a wholly owned subsidiary of Real Estate Opportunities plc. Shareholders attention is drawn to Real Estate Opportunities plc preliminary results which are also published today (23 June 2010).

CHAIRMAN'S STATEMENT

Real Estate Opportunities plc (“REO”) has commenced preliminary discussions with certain key holders of loan instruments supporting the business including holders of the Zero Dividend Preference Shares (“ZDPs”) with a view to agreeing a consensual restructuring of the Group’s Balance Sheet prior to their repayment date on 31 May 2011. The Board has appointed a restructuring adviser, Talbot Hughes McKillop, to assist in these negotiations and the Company expects to update shareholders in due course as these discussions advance.

Company background
On 14 February 2008 the Royal Court of Jersey granted approval for a Scheme of Arrangement (described in a circular to the shareholders of Real Estate Opportunities plc (‘REO’ or ‘the Group’) dated 18 December 2007). The Scheme involved the ZDP shares, part of the share capital of REO being cancelled and, in exchange, New ZDP Shares were issued on a one for one basis by REO Securities Limited (‘the Company’), a newly incorporated subsidiary of REO. Implementation of the Scheme will allow the new ZDP Shares to be repaid by way of winding up of REO Securities Limited on 31 May 2011 rather than the winding up or reconstruction of REO itself.

Admission of the 57,755,782 New ZDP Shares of REO Securities Limited to the Official List of the UK Listing Authority took place on 18 February 2008, with dealings therein on the London Stock Exchange commencing on the same day.

Going concern
The Company’s major asset is a receivable from its parent, REO a company incorporated in Jersey. REO Securities’ ability to continue in business and satisfy its future obligations to the holders of the ZDP’s is dependent on REO. To that end, REO and REO Securities Limited have entered into an arrangement pursuant to an Undertaking Agreement whereby the net assets of REO will effectively be made available to meet the repayment entitlement of the ZDP Shares on the Repayment Date, 31 May 2011.

At 28 February 2010, the Group had total borrowings of £1.721 billion.  At that date, the Group also had cash and cash equivalents of £21.1 million, restricted cash of £17.7 million and an investment in CREO of £27.7 million which was realised in cash subsequent to the year end.  The Group has an investment and development property portfolio valued at £1.1 billion and had a deficit on its shareholders’ funds of £722 million. 

The Group’s future operating performance will be affected by general economic, financial and business conditions, many of which are beyond the Group’s control.

At 28 February 2010, the Group had aggregate bank loans of £923 million classified as current liabilities.  In addition, the Group had aggregate obligations of £371 million due to the holders of its Convertible Unsecured Loan Notes (CULs), its Zero Dividend Preference shares (ZDPs) and the 6.324% Series A and B unsecured loan notes.  All of these instruments mature in May 2011 and based on the Group’s current financial position, the Group does not have the ability to repay those instruments on their maturity in May 2011. 

Each of the CULs and ZDPs mature in May 2011.  The liability at 28 February 2010 in respect of the CULs and the ZDPs is £101 and £122 million respectively.  In the case of the CULs, interest is paid every six months in the amount of £3.8 million and the next interest payment is due in August 2010.

The Series A and Series B unsecured loan notes in the aggregate amount of £147.8 million mature in May 2011.  Interest at the rate of 6.324% per annum is payable half yearly and the next interest payment due date is 31 August 2010 in the amount of £5.0 million.

The Irish Government established the National Asset Management Agency (NAMA) as a key part of the solution to the current banking difficulties in Ireland.  NAMA was established on a statutory basis under the aegis of the National Treasury Management Agency (NTMA).

NAMA is an asset management company established to acquire loans from participating institutions.  It will manage these assets (hold, dispose, develop or enhance them) with the aim of achieving the best possible return for the Irish tax payer on the acquired loans and on the underlying assets over a seven/ten year time frame. 

NAMA is a work out vehicle, not a liquidation vehicle, and can take a longer term view on borrowers and assets if it makes commercial sense to do so.  Subsequent to the period end, NAMA acquired Group loans from participating institutions with an aggregate value of £815 million at 28 February 2010.  As required by NAMA, the Group has submitted a detailed business plan which is currently being evaluated by NAMA with a view to seeking its approval to that plan.  This evaluation process is currently underway and the Directors believe that the plan will be approved following which NAMA will monitor the Group’s subsequent performance to ensure that we adhere to the targets contained in the business plan.  Whilst initial communications between NAMA and the Company support the Directors’ belief that NAMA will work alongside the Company’s other banks to provide support to the operations of the Group, no formal approval of the Group’s business plan has been received at this time. 

The Battersea Powerstation is a major development project in central London. The development costs are currently funded 75% by a consortium of lenders, with the balance financed by the Group.  The lenders are currently providing interest roll up on the existing debt.  The Battersea facilities expire in March 2011 and in preparing the Group’s business plan, the Directors have assumed that these facilities will be rolled over and renewed on broadly similar terms or alternatively will be re-financed on broadly similar terms. This has been approved by the banks’ credit committees but is now subject to the completion of legal documentation.

The key assumptions made in preparing the business plan for the Group for the period to 30 June 2011 include:

• The acceptance by NAMA of the Group’s business plan.
• The renewal by NAMA of bank facilities in the amount of £815 million on broadly similar terms.
• The agreement of NAMA to defer interest payments.
• The provision by NAMA of working capital facilities.
• The agreement of the holders of the CULS and Series A and Series B loan notes to a standstill on the payment of interest in the period to June 2011.
• Agreement with each of the holders of the CULS, ZDPs and Series A and B notes whereby the capital amounts due on maturity in May 2011 will not represent a cash outflow for REO.
• Certain of the Group’s fee arrangements with Treasury will be restructured to cap the fees paid in the period to June 2011.
• Planning permission for the proposed development of Battersea Power Station will be granted in 2010.
• It is anticipated the Group’s interest in Battersea will be restructured and that an equity partner will be introduced on the Battersea development providing all project financing from January 2011.

Based on the Group’s business plan and the key assumptions noted above, the directors believe that the Group will have sufficient cash and cash equivalents to meet its liquidity requirements for at least twelve months from the date of approval of the financial statements.

Following the anticipated Battersea restructuring, the Group will continue to have a deficit on its shareholders’ equity and, as a consequence, it is anticipated that the Group will require ongoing financial support from NAMA and its non NAMA lenders in the period beyond June 2011.

The Directors of the Company have concluded that the above factors represent material uncertainties.  Were the assumptions and objectives not to be achieved, it could cast significant doubt on the ability of the Group to continue as a going concern and it may therefore be unable to realise its assets and discharge its liabilities in the normal course of business.  Nevertheless, having discussed the basis of preparation and the assumptions underlying the Group’s cash flow projections, together with the current status of negotiations with NAMA and the Group’s other lenders, and assuming the roll over and renewal of expiring facilities and required further waivers are put in place within the required time scales, the Directors of the Company have a reasonable expectation that the Group will be able to meet its liabilities as they fall due for the foreseeable future.  It is on that basis that the Directors consider it appropriate to prepare the financial statements on a going concern basis.  These financial statements do not include any adjustment that would result from the going concern basis of preparation being inappropriate.       

Ray Horney
Chairman

Annual Report for the 14 months ended 28 February 2010

REO Securities Limited

Ray Horney, Chairman of REO Securities Limited (the “Company”), is also non-executive chairman of Rayford Homes Limited. In accordance with Listing Rule 9.6.14, the Company announces that it has been notified that Rayford Homes Limited was placed into administrative receivership on 18 November 2009.

Interim Results for the six months ended 30 June 2009

REO Securities is a wholly owned subsidiary of Real Estate Opportunities plc. Shareholders attention is drawn to Real Estate Opportunities plc interim results which are also published today (27 August 2009).

CHAIRMAN’S STATEMENT

Company Background
On 14 February 2008 the Royal Court of Jersey granted approval for a Scheme of Arrangement (described in a circular to the shareholders of Real Estate Opportunities plc (‘REO’ or ‘the Group’) dated 18 December 2007). The Scheme involved the Zero Dividend Preference Shares (“ZDP Shares”), part of the share capital of REO being cancelled and, in exchange, New ZDP Shares were issued on a one for one basis by REO Securities Limited (‘the Company’), a newly incorporated subsidiary of REO. Implementation of the Scheme will allow the new ZDP Shares to be repaid by way of winding up of REO Securities Limited on 31 May 2011 rather than the winding up or reconstruction of REO itself.

Admission of the 57,755,782 New ZDP Shares of REO Securities Limited to the Official List of the UK Listing Authority took place on 18 February 2008, with dealings therein on the London Stock Exchange commencing on the same day.

Activities
The Company is a wholly owned subsidiary of REO, and forms part of the Real Estate Opportunities plc Group (the “Group”). REO is a property company investing mainly in the Irish and UK property markets but also overseas.

The Company was incorporated as part of a Scheme of Capital Restructuring of the REO Group so as to remove the requirement that REO be wound up in 2011. On the 18 January 2008 shareholders of REO passed all resolutions proposed at the Class Meeting of the zero dividend preference shareholders relating to the Scheme of Capital Restructuring.

On 14 February 2008 the Court approved a scheme for REO to cancel the share premium account and to cancel the existing zero dividend preference shares and to issue in exchange zero dividend preference shares (“ZDPs”) in the Company.

On the 18 February 2008, the entire issued zero dividend preference shares of REO were suspended from trading prior to cancellation. On the same day zero dividend preference shares in the Company issued to the former zero dividend preference shareholders of REO, commenced trading.

Status
The Company was incorporated on 27 April 2007 and as a wholly owned subsidiary of REO, forms part of a closed ended collective investment fund, as defined in the Collective Investment Funds (Jersey) Law 1988, as amended, and the subordinate legislation made thereunder.

The Company has applied for international service entity status under the Goods and Services Tax (International Service Entities) (Jersey) Regulations 2008 in respect of the year ended 31 December 2008 and 31 December 2009. Goods and Service Tax was introduced with effect from 6 May 2008.

The Company has been granted exempt status under Article 123A of the Income Tax (Jersey) Law 1961 in respect of the year ended 31 December 2008. With effect from 1 January 2009 the Company moved to a 0% rate of income tax following the abolition of exempt company status.

The Company is registered in Jersey under number 97292.

Capital Structure
The Company has a capital structure comprising Ordinary and Zero Dividend Preference Shares (“ZDP’s”). The ordinary shares are unlisted and are beneficially held by Real Estate Opportunities plc (“REO”). Accordingly, REO Securities Limited is a wholly owned subsidiary of REO. The ZDP’s are listed on the London Stock Exchange.

Going Concern
The Company’s major asset is a receivable from its parent, REO a company incorporated in Jersey. REO Securities’ ability to continue in business and satisfy its future obligations to the holders of the ZDP’s is dependent on REO. To that end, REO and REO Securities Limited have entered into an arrangement pursuant to an Undertaking Agreement whereby the net assets of REO will effectively be made available to meet the repayment entitlement of the ZDP Shares on the Repayment Date, 31 May 2011.

At 30 June 2009 REO had total borrowings of £1,621 million. At that date, REO had cash, cash equivalents and restricted cash of £61 million and a deficit on consolidated shareholders equity of £88 million. REO has an investment and development property portfolio valued by its Directors at £1,622 million.

REO’s future operating performance will be affected by general economic, financial and business conditions, many of which are beyond REO’s control. REO’s bank borrowings are mainly provided by financial institutions operating in Ireland and the United Kingdom. These financial institutions currently face financial difficulty and in many cases are being supported by Government. Significant deterioration in the economic environment in Ireland and the United Kingdom could have a material adverse impact on the value of REO’s property portfolio and shareholders equity and as a consequence on REO’s ability to obtain longer term debt or equity financing required to meet its longer term financing and liquidity requirements beyond 2010.

REO’s Board, together with REO’s Investment Adviser, have focused on cash conservation. A series of cost cutting measures have been implemented across REO and a full review of REO’s detailed financial plan for the next 15 months has been carried out. A number of key assumptions have been made in preparing this plan, including: bank facilities that are due in 2009 and 2010 amounting to £556 million and £201 million respectively will be rolled over and renewed on broadly similar terms; if there are further declines in values which may result in breaches of loan facility covenants, it is assumed that the existing facilities will remain in place and be renewed, as is consistent with REO’s recent experience; and REO will realise £35 million to £40 million in cash following the completion of one of a number of corporate transactions that are currently being explored. Based on these assumptions, REO’s Board believes that there is adequate cash and cash equivalents to meet its working capital requirements until November 2010.

The Directors of the Company have concluded that the above factors represent material uncertainties. Failure by REO to deliver on the forecast assumptions may cast significant doubt on the ability of the Company to continue as a going concern and it may therefore be unable to realise its assets and discharge its liabilities in the normal course of business. Nevertheless, having discussed the basis of preparation and the assumptions underlying REO’s cashflow projections together with assessing the current status of negotiations with REO’s current lenders, and assuming the rollover and renewal of expiring facilities and required further waivers are put in place within the required timescales, the Directors of the Company have a reasonable expectation that the Company will be able to meet its liabilities as they fall due for the foreseeable future. It is on this basis that the Directors consider it appropriate to prepare the financial statements on a going concern basis. These unaudited interim financial statements do not include any adjustment that would result from the going concern basis of preparation being inappropriate.

Valuation of investment and development properties
REO’s principal assets comprise investment properties and investment properties under development properties, located in Ireland and the UK, which are being carried in the financial statements at market value.

The Directors of REO appointed the Investment Adviser to conduct the valuations using assumptions, and exercising certain judgements, based on market conditions as at 30 June 2009. Shareholder attention is drawn to the Investment Advisers Report in REO plc’s interim results for further details. These results are also published today, 27 August 2009.

Real Estate Opportunities plc
Shareholders’ attention is drawn to the publication of the preliminary results for Real Estate Opportunities plc issued on the 27 August 2009 for reference.

Interim Report and Accounts for six months to 30th June 2009

Board Changes

REO Securities Limited (‘REO Securities’ or the 'Company') announces that Guy Leech, Group Finance Director of Treasury Holdings, has resigned from the REO Securities Board with effect from 26th June 2009 to pursue other business opportunities.

Peter Byers has been appointed to fulfill the role of Group Finance Director of Treasury Holdings and will be responsible for overseeing the financing of Treasury Holdings’ investment and development property portfolio. Peter was previously Group Finance Director of Heiton Group plc. Treasury Holdings is investment adviser to the parent company, Real Estate Opportunities plc (‘REO’), in relation to its Irish property portfolio and to REO’s global property assets.

Commenting on the changes, Ray Horney, REO Chairman, said: “We thank Guy for his contribution over the past number of years and wish him well in the future.”

Result of Annual General Meeting 

The Board of REO Securities Limited announces that all resolutions put to shareholders at the Annual General Meeting were passed.

Annual Information Update

This annual information updated is required by, and is being made pursuant to, Article 10 of the Prospectus Directive as implemented in the United Kingdom (Prospectus Rule 5.2) and not for any other purpose and neither the Company, nor any other person, takes any responsibility for, or makes any representation, express or implied, as to the accuracy or completeness of, the information which it contains. This information is not necessarily up to date as at the date of this annual information update and the Company does not undertake any obligation to update any such information in the future.

1. Regulatory Information Service (‘RIS’) announcements

2008

2009

All of the information listed above is available for viewing on the London Stock Exchange RNS website.

Preliminary Results Annoucement for the year ended 31st December 2008

Click here to view the Preliminary Results Announcement

Interim Management Report for the six months to 30 June 2008

Highlights

On 14 February 2008 the Royal Court of Jersey granted approval of a Scheme of Arrangement (described in a circular to the shareholders of Real Estate Opportunities Limited (‘REO’) dated 18 December 2008).  The Scheme involved the Zero Dividend Preference Shares ("ZDP Shares"), part of the share capital of REO, being cancelled and, in exchange,  New ZDP Shares being issued to ZDP Shareholders on a one for one basis. The New ZDP Shares were issued by a newly incorporated subsidiary of REO, REO Securities Limited. Implementation of the Scheme allowed the New ZDP Shares to be repaid by way of the winding up of REO Securities Limited on 31 May 2011 rather than the winding up or reconstruction of REO itself.  
Admission of the 57,755,782 New ZDP Shares of REO Securities Limited to the Official List of the UK Listing Authority took place on 18 February 2008, with dealings therein on the London Stock Exchange commencing on the same day.  These interim accounts constitute the first set of accounts of REO Securities Limited.
Shareholders’ attention is drawn to the publication of the interim results for Real Estate Opportunities Limited also published today (29 August 2008).

Click here to view the full report as a PDF