10/10/2014
Pricing of Secured Notes and intention to return £1.20 per share to shareholders
On 17 September 2014, Dignity Finance PLC (the issuer of the Secured Notes and a subsidiary of Dignity (2002) Limited, the holding company of the securitised sub-group of Dignity plc) called meetings of its Class A and B Noteholders ("Noteholders") ("Meetings"). Dignity Finance PLC also, on 17 September 2014, invited Noteholders to offer to exchange their existing Class A and Class B Secured Notes for new notes ("Exchange Offers").
The principal purpose of the Meetings was to obtain certain approvals to facilitate the Exchange Offers and the issue of further new Secured Notes for cash. The Meetings were held yesterday and, as previously announced, the Noteholders gave the requisite approvals to proceed.
Dignity plc is pleased to announce that Dignity Finance PLC is to implement the Exchange Offers and that pricing for the new Secured Notes has now been determined and is summarised below.
| Class A | Class B | |
|---|---|---|
| Total new issuance at par (£m) | 238.9 | 356.4 |
| Legal maturity of new notes | 31 December 2034 | 31 December 2049 |
| Coupon on new notes | 3.5456% | 4.6956% |
Gross proceeds from the transaction are expected to be circa £88 million. After making certain payments to effect the Exchange Offers, and retaining funds for fees, a payment of £1 million into the Group's defined benefit pension scheme and reserving approximately £10 million for general corporate purposes (including acquisitions), it is the Dignity Group’s intention to return £64.4 million to its shareholders, equating to £1.20 per ordinary share. As a consequence of the transaction, the Group's annual debt service obligations are expected to reduce from £40m to circa £33.2m.
The interim dividend declared on 30 July 2014 will still be paid on 31 October 2014 and will not be affected by this announcement.
Dignity plc anticipates that Dignity Finance PLC will execute the subscription agreement with the Lead Manager, the Royal Bank of Scotland plc, on or around 13 October. Closing and settlement of the Exchange Offers and the new Secured Notes are anticipated to occur on 17 October. Until such time, there can be no guarantee that the new further Secured Notes will be issued and consequently no guarantee a return of cash will be made to shareholders.
Based on this timetable, Dignity plc expects to issue a circular to shareholders, incorporating a notice of a general meeting on or around 14 October. It is anticipated that at the general meeting, resolutions will be proposed which, if passed, will give shareholders the opportunity to receive the £1.20 per share either in the form of a dividend or as a return of capital. The meeting will also be asked to approve a consolidation of Dignity plc's ordinary shares, which is intended to maintain comparability of the company's performance measures such as earnings per share and share price.
Dignity plc will make further announcements as appropriate.
For more information:
Mike McCollum, Chief Executive
Steve Whittern, Finance Director
Dignity plc
+44 (0) 121 354 1557
Richard Oldworth
Sophie McNulty
Clare Akhurst
Buchanan Communications
+44 (0) 20 7466 5000