TIDMNEPI
RNS Number : 1875A
New Europe Property Investments PLC
05 October 2009
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New Europe Property Investments plc
(Incorporated and registered in the Isle of Man with registered number 001211V)
(Registered as an external company with limited liability under the laws of
South Africa, registration number 2009/000025/10)
AIM share code: NEPI
JSE share code: NEP
ISIN Code: IM00B23XCH02
("NEPI" or "the Company")
INVESTMENT ACQUISITION AND FURTHER CAUTIONARY
New Europe Property Investments plc, the Central and Eastern European property
investment company which has a primary listing on the AIM market of the London
Stock Exchange and a secondary listing on the Alternative Exchange of the JSE
Limited, announces a further investment for a total estimated debt free price of
approximately EUR63 million, subject to working capital adjustments, which will be
settled in a combination of cash (partly funded with a new debt facility) and
the issue of ordinary shares in NEPI ("Vendor Shares").
The Company has concluded a sale and purchase agreement ("SPA") to acquire the
shares in the holding company
of the European Retail Park in Braila ("ERP Braila") from BelRom, a leading
retail developer in Romania ("the Acquisition"). NEPI has also agreed an
acquisition debt funding facility from KBC Bank for an amount of EUR113 million of
which EUR40 million will be used to pay down existing debt on ERP Braila. The
facility is repayable at the end of 2014, with capital amortisation starting in
2011. As a result, the balance of the consideration payable for the shares
is approximately EUR23 million, comprising a mixture of cash payable from the
Company's own resources and the issue of Vendor Shares at a price of EUR2.026 per
share. The precise cash and share mixture is at the discretion of the Company
and will be confirmed in due course, but of the Vendor Shares, 3,587,148 will be
subject to a lock-in agreement and will be held in escrow.
The Acquisition will become effective from the date on which the Vendor Shares
will be admitted to trading on AIM and the JSE Limited which is expected to
be no later than 19 October 2009.
Braila is a city of over 200,000 people in Eastern Romania, approximately 201km
from Bucharest and with a port on the Danube River. ERP Braila has convenient
access from the national road which forms one of its boundaries and benefits
from a core catchment area of over 159,000 people, with a total catchment area
of over 290,000 people given its close proximity to the city of Galati, with a
population of approximately 300,000 and only one, smaller scale shopping centre.
ERP Braila is a 143,000 square metre site with approximately 53,000 square
metres of gross lettable area and a 60,000 square metre customer parking area
comprising 1,250 parking spaces. The retail park already has opened stores
for two
of its three main anchor tenants: Carrefour Hypermarket and Bricostore DIY.
There is also a 6,900 square metre showroom and store for a Romanian furniture
retailer, Staer, which is in the process of completion as well as a
multiple-screen cinema
development that is expected to be completed by mid 2010.
The SPA provides for a guarantee of Net Operating Income ("NOI") levels to be
achieved by the property from the vendors
for the next three years and a price adjustment mechanism should the NOI at the
end of the guarantee period (31 December 2012) be less than the agreed 2009 NOI
target, adjusted for indexation. The NOI figures represent "normalised NOI" as
at the date of the memorandum of understanding entered into during June 2009,
based on the completed centre and disregarding temporary tenant discounts. The
NOI guarantee is EUR5.88 million in respect of the 2009 financial year. The
performance guarantee is secured against and limited to the value of the
Vendor Shares and related dividends which are issued to and retained by the
vendors in escrow.The Acquisition is expected to improve distributable earnings
per share.
For purposes of compliance with the JSE Limited Listings Requirements, the
Company advises shareholders that NEPI remains in negotiations to acquire
certain other retail assets in Romania, which if successfully concluded may also
have a material effect on NEPI's financial position and consequently on the
price of the Company's shares. No certainty can be given that these negotiations
will be concluded successfully. Accordingly, shareholders are advised to
continue to exercise caution when dealing in their NEPI shares until further
announcements are made in this respect.
5 October 2009
For further information please contact:
+--------------------------------------------------------------+----------------------+
| New Europe Property Investments plc | +40 74 432 8882 |
| Martin Slabbert | |
| | |
+--------------------------------------------------------------+----------------------+
| Smith & Williamson Corporate Finance Limited | +44 20 7131 4000 |
| Azhic Basirov / Joanne Royden-Turner | |
| | |
+--------------------------------------------------------------+----------------------+
| South African sponsor | +27 11 283 0042 |
| Java Capital (Proprietary) Limited | |
| | |
+--------------------------------------------------------------+----------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
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