Investment Update
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Date: |
9 March 2011 |
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On behalf of: |
Carpathian PLC ("Carpathian", the "Company" or the "Group") |
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For immediate release |
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Carpathian PLC
Investment update
On 17th November 2010 Carpathian announced the signing of a Preliminary Sale Agreement for the disposal of three of the four assets comprising the Blue Knight portfolio in Poland. We are now pleased to announce that the sale of the properties in Lodz, Torun and Sosnowiec has completed.
The gross sale price remains €40.2 million and is subject to potential minor adjustments arising from post closing retentions.
The direct debt repayment to Deutsche Pfandbriefbank ('DPB') from the sales proceeds is approximately €22.8 million including fees. In addition, DPB will also hold approximately €7.9 million in escrow against the cross-collaterised indebtedness of Promenada and Gdansk and €0.9 million against the separate debt facility relating to Babilonas. If the sale of either Promenada or Gdansk is completed before Carpathian is in a position to repatriate funds from Poland through overseas subsidiaries to the ultimate holding company, DPB's loans will be repaid from those sales proceeds and the escrow amounts will be released to Carpathian. If those sales are not completed at such time, the escrow amounts will be applied to reduce indebtedness secured against those properties.
Therefore, the initial net equity amount realised and to be transferred from Poland to the holding company from the partial Blue Knight sale will be €7.6 million.
The corporate restructuring of the asset owning companies had been completed before the sale and therefore the deferred tax liability of approximately €3.9 million as at 30 June 2010 is substantially lowered.
Following the sale, the annualised net operating income within the Company will reduce by approximately €3.5 million.
Blue Knight portfolio - Gdansk
Discussions are ongoing to resolve technical due diligence points following which agreed outline terms for a sale will shortly be signed, or the property marketed more widely.
In the meantime, the corporate restructuring of the asset owning company has also been completed. Therefore the deferred tax liability of approximately €3 million as at 30 June 2010 is substantially lowered.
Promenada
The property due diligence process and the corporate restructuring of the Promenada asset owning companies are progressing on schedule. The sale is expected to be subject to VAT, therefore the €1.5 million purchase price top up as announced on 20th of December 2010 is expected to be realised on completion.
Slupsk
An offer for this property is currently being progressed through due diligence.
Satu Mare
An exclusivity period has been granted to a potential buyer whilst it undertakes due diligence. If due diligence is concluded satisfactorily, the exclusivity will be extended to enable a sale contract to be negotiated and entered into.
Babilonas
Following the potential debt reduction referred to above and successful efforts to rebuild income following the initial impact of the credit crunch upon retailer activity, the Board of Carpathian has changed the designation of this property from a Non-core to a Core Asset as there may now be some prospect of an equity realisation.
As such, the Investment Property Adviser, Carpathian Asset Management Limited is now focused upon the potential sale of Babilonas, and value realisation for shareholders.
Shareholder Distribution
The Company is in the process of reviewing the cash proceeds required to meet its current working capital requirements in the context of the current sales programme and intends to distribute as much as possible of these net proceeds to shareholders as soon as practicable in accordance with the previously declared intentions of the Board.
- Ends-
Enquiries:
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Carpathian PLC |
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Rory Macnamara, Non-executive Chairman |
Via Redleaf Communications |
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CPT LLP |
020 7529 6413 |
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Paul Rogers/Balazs Csepregi |
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Collins Stewart Europe Limited |
020 7523 8350 |
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Bruce Garrow |
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Redleaf Polhill |
020 7566 6700 |
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Mike Ward |
Notes to Editors:
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Carpathian was created in 2005 for the purpose of investing in Central and Eastern European commercial real estate. |
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Carpathian's primary focus is on shopping centres, supermarkets and retail warehousing in Croatia, the Czech Republic, Hungary, Poland, Romania, Lithuania and Latvia. |
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Carpathian was admitted to trading on AIM in July 2005. |
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CPT LLP is the Property Investment Adviser to Carpathian. CPT LLP owns 100% of Carpathian Asset Management Limited (ÒCAMÓ). CAM, which was previously owned 50% by the Company, became fully externalised when the Company and CPT LLP implemented the new portfolio management agreement on 1 March 2010. CAM, together with its parent undertaking, CPT LLP, is responsible for managing the core portfolio of assets and transactions within Central and Eastern Europe.
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This information is provided by RNS