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Utilico Emerging Markets Limited Bank Facilities And Accounting
Hamilton, Bermuda, March 19, 2007 - Bank Facilities: UEM has entered into new bank facilities amounting to £60.0m with Bank of Scotland Corporate. This is a multi-currency facility secured on the assets of UEM and comprises three tranches, A, B and C.
Tranche A, B and C are each for £20.0m and mature in 12 months, 36 months and 60 months respectively and the rate of interest on each tranche is libor plus 1.00%, 1.25% and 1.50% respectively.
The initial drawings under the facility will be £20.0m from tranche A and £15.0m from tranche B. The proceeds will be used to repay the existing Royal Bank of Scotland facility of £25.0m and to provide funds for investment into the market.
The board and management of UEM look forward to a long-term and strategic working relationship with Bank of Scotland Corporate.
Accounting Treatment: The board of UEM has considered the impact of the increased leverage and costs of the facility on the revenue account. To better align the costs associated with the increased borrowings and the nature of UEM's objective to achieve long-term capital appreciation, the board has determined to allocate the management fee and the finance costs; 70% to capital and 30% to revenue.
This will enable the company to sustain dividend payments, which better reflect the revenue nature of the portfolio.
This policy will be adopted for the financial year beginning 1 April 2007 to 31 March 2008.