LONDON (Alliance News) - Arricano Real Estate PLC Friday said it has improved its working cash position by extending the payment date for its acquisition of Wayfield Ltd while also entering into a related loan agreement.
The retail real estate developer and operator in Ukraine said it has now entered into a deed of amendment with Vunderbuilt, a company controlled by Hillar Teder, to extend the payment date for its purchase of Wayfield Ltd to April 2015. The deadline for the deferred consideration of USD20 million had been April 30.
Vunderbuilt is a 27.87% shareholder in Arricano following the issuing of shares to Vunderbuilt as part of Arricano's September 2013 initial public offering on AIM in exchange for four development sites.
Arricano also said Friday it has entered into a loan agreement with Bytenem Ltd, an affiliate of Vunderbuilt that is also controlled by Teder, in order to compensate Bytenem for a loan repayment to UBS AG on its behalf.
In July 2013, Arricano, International Baltic Investments Ltd, Bytenem and UBS entered into a number of agreements, whereunder Arricano received through IBI a loan in amount of USD28.5 million and guaranteed the repayment of a loan in amount of USD28.8 million by International Baltic Investments to UBS under a facility agreement.
However, as a result of recent political unrest in Ukraine, in March, the companies all entered into a number of agreements, whereby the amount of the IBI Loan was reduced to USD15.3 million following a partial repayment by Arricano of the loan amounts under the IBI Loan.
Under these arrangements Arricano repaid UBS directly USD3.5 million of the original loan and Bytenem repaid UBS USD10.0 million of the original loan on behalf of Arricano.
The group said the new loan agreement with Bytenem also incorporates a USD2 million facility to boost working capital resources.
"Both of these agreements will enhance the financial position of the business, increasing the cash within the business by extending the deferred payments terms on Wayfield and switching some of our borrowings to a new lender well known to the business," said Chief Executive Officer Yarema Kovaliv in a statement.
Arricano said trading at its four shopping and entertainments centres remain broadly in line with its expectations.
Arricano shares dropped 14% Friday morning, trading at 2.13 pence per share.
By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty
Copyright 2014 Alliance News Limited. All Rights Reserved.