Home Consortium ReShapes Woolworths Security Arrangements

Home Consortium has today also entered into an agreement with Woolworths and the Home Investment Consortium Trust (“HICT”) to propose a restructure of the existing security that Woolworths holds for its guarantee of the leasehold properties.

The initial security arrangements were entered into with Woolworths in 2017 as part of the acquisition of the former Masters property portfolio, including a second ranking security over Home Consortium’s assets.

HICT is Home Consortium’s foundation securityholder and currently provides an indemnity to Home Consortium for all economic exposure of the seven remaining leasehold properties. As a result of the proposed transaction Home Consortium’s company structure is simplified with no leasehold properties or legacy guarantees remaining within the group.

The entity holding the guaranteed leases and lease mitigation account are transferred to HICT resulting in no change in economic exposure as HICT already provides an indemnity to Home Consortium.

As part of the proposed new security arrangement HICT will grant Woolworths first ranking security over up to 80 million Home Consortium stapled securities held by HICT in return for its continued guarantee of the leasehold properties.

The agreement concerning entry into the new security arrangement is that Woolworths is deemed to acquire a relevant interest in Home Consortium stapled securities.

Woolworths has confirmed that the proposal solely relates to the simplification of its security arrangements and does not reflect any intention of corporate activity in relation to Home Consortium. The proposal, which has been considered and reviewed by Home Consortium’s independent directors in compliance with its related party transaction policy, remains subject to a number of conditions (which includes Home Consortium securityholder approval).

Home Consortium will seek securityholder approval for this proposal at its 2020 annual general meeting on 18 November 2020