Statement re. Media Comment a

RNS Number : 9620Y

Dawnay, Day Carpathian PLC

14 July 2008

 



Dawnay, Day Carpathian PLC

('Carpathian' or the 'Company')

Dawnay, Day Carpathian PLC ('Carpathian'), the retail property investment company established to invest in Central and Eastern Europe, is aware of the reports in the press over the weekend regarding the Dawnay, Day Group ('DDG'). 

The Board of Carpathian wishes to stress to shareholders that the Company, save as mentioned in this announcement, is totally unaffected by the reported problems at DDG - in particular it owns all its assets, which are in any event held independently of the Dawnay, Day Group.  In addition, the Company is financially independent of the Dawnay, Day Group and the Board comprises four non-executive directors, of which three are independent.  The Company continues to pursue development and investment opportunities which demonstrate the strong returns which the Company has committed to securing for all its shareholders.

The Board of Carpathian has been in discussions with its advisors and with DDG to secure access to the property management services currently provided by Dawnay, Day Europe, on behalf of DDG. The Board is pleased to announce that an agreement in principle has been successfully reached between, inter alia, the Company and Dawnay, Day Europe, on behalf of DDG.  Pursuant to this agreement, the existing portfolio management agreement and the existing development management agreement (together, the portfolio management agreement and the development management agreement being the 'Existing Management Agreements') will be terminated, with immediate effect, by agreement and a new manager will be appointed.  The replacement manager will be a newly-incorporated company ('Newco'), in respect of which the Company will hold 9.9 per cent. of the issued share capital of Newco and shall have the right to appoint a director to Newco's board. The balance of Newco's shareholding will be held by two of the principals of Dawnay, Day PanTerra, Carpathian's property investment advisor, namely Paul Rogers and Massimo Marcovecchio.  

A new management agreement will be entered into between the Company and Newco (the 'New Management Agreement'), such agreement to be on substantially the same terms as the Existing Management Agreements.  In addition, the Company has agreed to provide a loan facility of £500,000 to Newco, on arm's length commercial terms and at an annual interest rate of 10 per cent., such facility to be available to be drawn-down over the next three months.  Security over the loan will be granted by way of a debenture over Newco and the loan will be repayable in three years.  The loan will be used for working capital purposes, including payments to Dawnay, Day Europe, which will continue to provide to Newco the relevant services to enable it to perform under the terms of the New Management Agreement.  In addition, these arrangements will enable the continued availability to Carpathian of the development management services of PanTerra's Atrium Centers affiliates in both Hungary and Romania.

The contractual documentation giving effect to the above agreement is to be prepared and finalised as soon as practicable.

Enquiries: 

Dawnay, Day Carpathian PLC:                                      01624 825002

                                                                                      Rupert Cottrell

Dawnay, Day PanTerra:                                                 020 7834 8060

                                                                                      Paul Rogers 

                                                                                      Balazs Csepregi

                                                                                      Simon Killick  

Numis Securities Limited:                                              020 7260 1000

Nominated Adviser                                                           Anthony Richardson

                                                                                      Nick Westlake 

Corporate Broking                                                            Charlie Farquhar 

Redleaf Communications:                                              020 7822 0200 

                                                                                       Emma Kane

                                                                                       Adam Leviton

                                                                                       Henry Columbine

 

END

 

 

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