| Mon 5 Oct 2009, 9:00 | | NEP - New Europe Property Investments plc - Investment Acquisition And |
|
NEP
NEP
NEP - New Europe Property Investments plc - Investment Acquisition And
Further Cautionary
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
Java Capital (Proprietary) Limited +27 11 283 0042
Date: 05/10/2009 09:00:02 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
