Sovereign Wealth Funds surveyed on Proposed PPN Issue
05/11/2010

Prime Placement Advisers engaged to survey Sovereign Wealth Funds

Online PR News – 11-May-2010 – – Prime Placement Advisers, a specialist in researching pre-placement interest levels for innovative financial and investment products among institutions and other qualified high net worth investors, has been engaged by R S Management Limited (RSM) – developers of the Richman’s Club and The Royal Nanjing Jockey Club, to poll selected Sovereign Wealth Funds, corporations and other qualified investors on their interest level in a proposed issue of Redemption Secured Profit Participation Notes (PPNs).

According to Dr A S Johan, an adviser to RSM, the proposed PPNs are not direct debt nor equity by or in RSM but are a hybrid to be issued pursuant to a binding contract between the issuer and each registered PPN holder. The terms of the PPN would thus become contractual obligations of the issuer in favor of registered holders of PPNs.

It is expected that a total of $200 million in face value of PPNs are to be considered. The PPNs are expected to be fully transferable, have a fixed tenor of five years and provide holders the right to receive 30% of the issuers annual audited net profits derived from their controlling equity interest in an integrated eco tourism and equestrian development in China.

In the event there are no audited net profits to be shared for any particular year, the PPNs will provide for the payment, at redemption, of an annual compensation amount – set to be considerably higher than currently available returns for equivalent issues. These annual compensation amounts will be fully adjusted for the time value of money.

The end of term redemption amount of the PPNs will be made up of the original par value plus the sum of all annual compensation amounts less profit sharing payments made during the five year term. However redemption shall not be for less than the original par value.

The maximum possible value of PPNs at redemption will, at issue and throughout their term, be fully secured through a registered first legal claim, in favor of PPN holders, on the issuers controlling shares in a 72,000,000 sq. ft. (1,652.89 acres) integrated eco tourism and equestrian development in China.

The book value of the assets serving as security for PPN redemption are expected to be an average of three times the maximum redemption value of the PPNs. The PPNs will also contain warranties including balance sheet values at issue date and anti-dilution provisions of the security offered for the term of the PPNs.

According to RSM, it is also likely that the PPNs will offer registered holders the option to convert the redemption value of their PPNs into shares in the integrated eco tourism and equestrian development company in China in the event a listing and IPO event occurs during the term of the PPNs. PPN holders option to convert will be set at an attractive discount to the IPO price.

For further information, please contact the author.