| Wed 6 Jun 2012, 16:24 | | NEP - NEPI - A Proposed Development A Buy-And-Lease Back Transaction with |
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NEP
NEP
NEP - NEPI - A Proposed Development, A Buy-And-Lease Back Transaction with
Mobexpert, update regarding Victoria City Centre and other opportunities
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
BVB share code: NEP
ISIN: IM00B23XCH02
("NEPI" or "the Company")
A PROPOSED DEVELOPMENT, A BUY-AND-LEASE BACK TRANSACTION WITH MOBEXPERT,
UPDATE REGARDING VICTORIA CITY CENTRE AND OTHER OPPORTUNITIES
The purpose of this announcement is to advise shareholders of various
agreements which NEPI has concluded and provide an update regarding
Victoria City Centre and other investment opportunities.
VULCAN TRANSACTION
NEPI has through its wholly-owned subsidiary, NE Property Cooperatief U.A.
("NEPC"),concluded a shareholders` agreement with Mr Michael Topolinski and
a Romanian special purpose vehicle Zircon Properties SRL ("Zircon") in
terms of which NEPC and Mr Topolinski agreed to jointly acquire a plot of
land in Bucharest via Zircon ("the Vulcan transaction").
Zircon is in the process of acquiring a 78,330 square metre plot of land in
Rahova, Bucharest from Balkam Petroleum SA ("the land acquisition"). NEPC
entered into the Vulcan transaction with the intention to develop a strip
mall anchored by a hypermarket and several other international value brands
("the proposed Vulcan development"). The site is a former factory site and
is located in a densely populated area of Bucharest which has good
vehicular and public transport access.
The proposed land acquisition is conditional on the issue of a local zoning
plan (known as a PUZ) to be obtained by Balkan Petroleum SA.
NEPC and Mr Topolinski have agreed to advance, in aggregate, between EUR15
million and EUR20 million to Zircon to settle the land acquisition price
and pre-development costs and will seek to raise bank finance for the
balance of the costs associated with the proposed Vulcan development.
NEPC`s final shareholding in Zircon will be determined formulaically based
on the amount of capital contributed by NEPC`s co-developer, Mr Topolinski
and NEPC`s shareholding in Zircon could potentially increase from its
current minimum of 50% up to a maximum shareholding of 95%.
Discussions with prospective tenants who will occupy the completed strip
mall are advancing well.
The Vulcan transaction is not categorisable in terms of the Listings
Requirements of the JSE Limited and the announcement of this transaction is
made for information purposes. Further announcements in relation to the
proposed Vulcan development will be made as and when appropriate.
BUY-AND-LEASEBACK TRANSACTION WITH MOBEXPERT AND POTENTIAL REDEVELOPMENT
Shareholders were advised in NEPI`s annual report for the year ended 31
December 2011 that NEPI was in the process of finalising a due diligence
with regards to a buy-and-leaseback transaction with Mobexpert, the leading
Romanian furniture retailer, in relation to its retail asset situated in
Brasov, Romania.
NEPI is pleased to advise that it has completed the acquisition of the
retail box and excess land from Mobexpertand has concluded a lease
agreement with Mobexpertfor the retail box.
In terms of the lease agreement, NEPI has an option to relocate Mobexpert,
should a re-development of the site be undertaken. NEPI is currently in
negotiations with Carrefour(the world`s second largest retail group) to
combine the assets acquired from Mobexpert with those of the adjoining
Carrefour hypermarket and to redevelop these assets into a regional mall.
Broad commercial terms have been agreed between Carrefour and NEPI
regarding a re-development, but the re-development would be subject to,
amongst other things, approvals being received from the boards of Carrefour
and NEPI and detailed transaction documents.
The buy-and-leaseback transaction with Mobexpertis not categorisable in
terms of the Listings Requirements of the JSE Limited and the announcement
of this transaction is made for information purposes. Further announcements
in relation to any proposed re-development will be made as and when
appropriate.
UPDATE REGARDING VICTORIA CITY CENTRE
Shareholders are referred to the previous announcements released on 17
November 2011, 20 December 2011 and 1 March 2012 in terms of which NEPI
advised that it had, through NEPC, acquired a 50% shareholding in a
development company S.C. Axa CD Real Estate Development S.R.L. ("the
development company") with the intention to participate in a proposed
development of a shopping centre in Bucharest known as Victoria City Centre
("the proposed Victoria City Centre development").
The proposed Victoria City Centre development was subject to, inter alia,
the shareholders of the development company being NEPC, Kitma Holdings
Limited ("Kitma") and Grenoui Holdings Limited ("Grenoui") approving a
project development plan together with Alpha Bank, which initially funded
the acquisition of the land plot by Kitma and Grenoui. NEPC was not able
to agree such a development plan with Kitma and Grenoui and has
consequently decided to withdraw from the proposed Victoria City Centre
development. NEPC has received the remaining EUR 4,875,898.99 of the EUR5
million it placed on escrow with Alpha Bank and will transfer the shares in
the development company to Kitma and Grenoui once the balance of its funds
has been refunded by these parties.
OTHER OPPORTUNITIES
NEPI is exploring a number of other investment and development
opportunities in Romania and in other countries in the region. As and when
appropriate, further announcements will be made in this regard.
6 June 2012
For further information please contact
New Europe Property Investments plc
Martin Slabbert +40 74 432 8882
Nominated Adviser and Broker: +44 20 7131 4000
Smith & Williamson Corporate Finance Limited
Azhic Basirov/Siobhan Sergeant
JSE Sponsor: +27 11 283 0042
Java Capital
Romanian Advisor +40 21 222 8731
Intercapital Invest SA
Razvan Pasol
Date: 06/06/2012 16:24:03 Produced by the JSE SENS Department.
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