LONDON (Alliance News) - Eastern Europe-focused residential property developer Kimberly Enterprises NV on Monday said it will borrow EUR2.2 million on a short term basis from Real Property Investment to repay debt owed by subsidiary Eurobul Ltd to Bank Leumi Le-Israel Ltd.
The loan from Real Property Investment is interest free, Kimberly said in a statement, and will be repaid from the cash proceeds arising from the sale of Kimberly's property assets, including the Canadian residential developments it sold in January.
Real Property Investment, which owns 6.4% of Kimberly, is a sister company of the owner of GBES Ltd, which owns 53% of Engel Resources & Development Ltd, which in turn indirectly owns 68.35% of Kimberly. That makes the loan a related party transaction under AIM rules.
"The board of Kimberly considers, having consulted with its nominated adviser [Cairn Financial Advisers LLP], that the terms of the loan are fair and reasonable insofar as the company's shareholders are concerned," Kimberly said.
Kimberly also announced its subsidiary Arces Intenational BV has sold Palace Engel Vokovice SRO, a subsidiary of Arces. The sale is at book value and will result in proceeds of EUR700,000 going to Kimberly.
Shares in Kimberly were up 27.3% at 0.350 pence on Monday.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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