Raven Property Group yesterday warned of ‘uncertainty’ surrounding its ability to access the funds of its Russian subsidiaries as its expressed shock at the situation in Ukraine and expressed hope for a peaceful outcome.
The group has an investment portfolio of about 1.9m. square metres of grade ‘A’ warehouses in Moscow, St Petersburg, Rostov-on-Don – which is about 80 miles from the border with Ukraine – Novosibirsk and Nizhny Novgorod, as well as 49,000 square metres of commercial office space in St Petersburg.
‘The board of Raven is deeply shocked and saddened by the situation in Ukraine and the tragic consequences unfolding there,’ said Raven Property Group in a statement.
‘The market and information flows are chaotic and volatile and the board has engaged its advisers to interpret the impact of the sanctions on its operations although these are changing day by day.’
The immediate focus was on ensuring the group had liquidity in the correct currency in the appropriate jurisdiction, it said.
‘The ability of the company to continue to access the funds of its Russian subsidiaries and whether those funds can be converted to the correct currency at a commercial exchange rate is the greatest uncertainty at this time. We simply do not have clarity on the restrictions that may be placed on the access and movement of funds intra group at this present time. We are working with banks and lawyers in all jurisdictions but it is still too early to get any definitive view on cash flows available to the company.
‘We do not expect that this situation will change while there is no resolution to the events in Ukraine or how long restrictions will affect the group.’
Raven Property said inevitably its board would take a conservative financial approach.
‘At this time it is unlikely that either a distribution to ordinary shareholders in relation to the year ended 31 December 2021 or the preference share coupon for the quarter ending 31 March 2022 will be paid.
‘Any unpaid preference coupon will accumulate in accordance with the terms of the instrument. We will continue to monitor the position with respect to the company’s ability to access group funds and will make a further announcement at the appropriate time.’
It planned to announce its 2021 annual results on 21 March, but added: ‘These will obviously have been superseded by the current significant uncertainties.
‘The group remains in compliance with all of its banking covenants. At the end of 2021, rouble debt accounted for 64% of secured facilities and euro 36%. The group’s rouble debt facilities are hedged with interest rate caps over the term of the loans, with a weighted average term to maturity of 2.4 years from 1 January 2022 on those caps, protecting the group from the recent Central Bank of Russia rate hike.’
Operationally, the company said its portfolio was almost fully let with all rents collected for February and demands now issued for March payments – of which 29% had already been received.
‘We will issue further updates as appropriate,’ it added.
Raven Property chairman Richard Jewson said: ‘The board and company are well served by a committed and resourceful management and staff in Russia, Cyprus and Guernsey and many hold shares in the company. It is impossible to predict the challenges that may emerge in the coming weeks and we are grateful for their input and loyalty.
‘The board is working to do all it can to protect the interests of all stakeholders in these unprecedented times. We sincerely hope for a peaceful outcome to these terrible events.’
