Acquisition

RNS Number : 5694V

Globalworth Real Estate Inv Ltd

16 December 2013

 



Globalworth Real Estate Investments Limited

Acquisition of the Founder Pipeline

Guernsey, 16 December 2013: Globalworth Real Estate Investments Ltd. (AIM: GWI) ("Globalworth" or "the Company"), the real estate investment company targeting opportunities in Romania and the broader SEE and CEE regions, is pleased to announce the signing of contracts for the acquisition of the Founder Pipeline, which comprises "BOB" and "BOC", two income generating offices in Bucharest, Romania. It is expected that completion will take place in January 2014.

Dimitris Raptis, Deputy Chief Executive Officer and Chief Investment Officer of the Company commented: "Following the acquisition of Globalworth Asset Managers, this transaction marks another significant milestone in the Company's acquisition programme.  BOB and BOC are prime examples of the types of assets that meet Globalworth's investment criteria, as they are high quality properties, strategically located within Bucharest, easily accessible and predominantly let to high quality tenants. The acquisition of the three remaining key assets in the Initial Portfolio, Bucharest One, Tower Center International and Upground Towers, is expected to take place by the end of January 2014."

Information on the Founder Pipeline

"BOB" and "BOC" are both modern ("class A") office buildings located in the Northern part of Bucharest. BOB was completed in 2008 and comprises 23,631 sqm of Gross Built Area over seven floors above ground and has 161 open parking spaces.  BOC was completed in 2009 and comprises 58,581 sqm of Gross Built Area extending over eight floors above ground. BOB and BOC are part of a wider building complex developed by Globalworth's Founder and CEO Ioannis Papalekas between 2006 and 2011 which consists of three office buildings (including BOB and BOC), two residential towers (Upground Towers), retail space and other amenities.

BOB and BOC are both managed by Globalworth Asset Managers.

Key terms of the acquisitions of the Founder Pipeline

The contracts which have been signed for the acquisition of the Founder Pipeline are substantially in accordance with the terms approved by the Board, as disclosed in the Company's Admission Document.

Key terms of the acquisitions are as follows:

·     Total Acquisition Cost of Euro 152 million, representing a discount of circa 16.4% to the average appraised independent valuation of the assets as set out in Globalworth's Admission Document.

·    the equity part of the consideration for the transaction will be satisfied (a) through the issue of shares of no par value ("Ordinary Shares") equal to Euro 5,385,975 at the IPO placing price of Euro 5.00 (that is, 1,071,795 Ordinary Shares) to Day Lily Properties Limited, a Founder Company (as defined in the Admission Document) which has a 22% interest in the Founder Pipeline and (b) by the payment of Euro 19 million in cash to Thaumat Holdings Limited and RREEF Global Opportunities Fund III, the holders of the remaining 78% interest in the Founder Pipeline and associated shareholder loans.

·     Completion of the transaction is subject to i) waiver of the third party lenders' change of control clause in the underlying debt financing documents and ii) the approval of the Competition Council in Romania. The Company is already in advanced discussions with the third party lenders in order to obtain the relevant consents, whereas the approval of the Competition Council is more of a formal process which is currently underway. The Directors of Globalworth do not anticipate any issues with receiving the necessary consents and approvals in order to complete the transaction.

Further information on the Founder Pipeline

The Company's Admission Document included audited financial information covering the latest 3 financial years on each of BOB Development SRL and BOC Real Property SRL, the entities which own BOB and BOC respectively. Independent valuations of both assets can be found in the admission document. Certain key information from the admission document in relation to BOB and BOC is also reproduced below.

Property	Independent Valuation ("as is")	Acquisition Cost	Transaction Cost	GBA	Stabilised NOI	Stabilised NOI yield
	€ million	€ million	€ million	sq m	€ million	%
BOB	47.6	42.00	42.00	23,631	4.2	10.0
BOC	134.2	110.00	110.00	58,581	10.1	9.2

Related Party Transaction

Ioannis Papalekas is a related party under the AIM Rules and as such the acquisitions of BOB and BOC are classified as a related party transaction for the purposes of Rule 13 of the AIM Rules. The Directors (other than Mr Papalekas), having consulted with Panmure Gordon, consider the terms of the acquisitions of BOB and BOC to be fair and reasonable insofar as the Company's shareholders are concerned.

For further information visit www.globalworth.com or contact:

Panmure Gordon (Nominated Adviser)                             Tel: [phone]

Nicola Marrin

Freddy Crossley

Cantor Fitzgerald Europe (Joint Broker)                            Tel: [phone]

Rick Thompson

David Porter

Milbourne (Public Relations)                                               Tel: [phone]

Tim Draper

About Globalworth:

Globalworth Real Estate Investments Ltd is a real estate investment company founded by real estate investor and developer Ioannis Papalekas to take advantage of investment opportunities in Romania and the broader SEE and CEE regions. The company is Guernsey incorporated and registered as a closed-ended collective investment scheme by the Guernsey FSC. The Company's shares were admitted to trading on AIM in July 2013.

The Romanian market offers an attractive real estate investment proposition in the medium-to-long term. Globalworth believes that global investor capital flows will gradually move from markets considered as "safe havens" to more peripheral markets such as Romania and the broader SEE and CEE regions in search of higher yielding investments. As a result, Romania and the broader SEE and CEE regions should, in due course, become more attractive destinations for a wide investor audience. Globalworth anticipates holding an early mover advantage in these markets and benefitting from this gradual shift in investor sentiment.

 

END

 

 

ACQUVAARORAUAUA