Adams Regulatory News (ADA)

21 Dec 2007 12:13

Dawnay, Day Carpathian PLC21 December 2007 DAWNAY, DAY CARPATHIAN PLC ("DDC" or the "Company") Announces the acquisition of six supermarkets in Croatia Dawnay, Day Carpathian PLC, the retail property investment company establishedto invest in Central and Eastern Europe, is pleased to announce the acquisitionof six supermarkets in Croatia, for a total purchase price of €53.7 million,representing an initial yield of 7.65%. DDC will be acquiring four Croatian special purpose vehicles that own the storesand will rent them to Konzum d.d. ("Konzum"), the largest retailer in Croatia,after the acquisition. Konzum's parent company, Agrokor, is the largest company in Croatia and besidesthe retail operations, it is the largest food manufacturing company in theregion of South Eastern Europe. Konzum's market share was 21.5%, and growing,when a comparison of the top ten retailers was undertaken in 2006 by GfK -Centre for Market Research. Konzum has over 570 stores throughout Croatia and itis estimated by Nacional Neovisni News Magazine that 500,000 people shop inthese retail stores every day. Two of the stores are located in Zagreb, two in commuter suburbs of Zagreb, onein Slavonski Brod and one in Kutina. The total lettable area is over 32,000square meters and all stores are in prominent areas and located on main arterialroutes. Five of the stores are to be acquired on new 15 year leases that willrun for a minimum of 10 years with 9 month break clauses and corresponding 9month penalty clauses in the final 5 years. Of the four stores in Zagreb, one,at Spansko, has three years left on the lease and Agrokor, the parent company,will provide a net operating income guarantee for another twelve years or untilthe property is re-let with a similar or better strength covenant, based on apredetermined valuation test. At all of the acquired stores, the rent will beindexed annually, reflecting 100% of the increase in EU 25 CPI. The transaction will initially be financed with equity upon completion. However,a credit approved loan offer has been received from a third party debt providerto refinance a proportion of the consideration early in the first quarter of2008. In the unlikely event the refinancing should not materialise and thereforeto mitigate the risk of equity financing the entire transaction, DDC mayexercise a put option to transfer the properties back to the seller. Commenting on the acquisition, Rupert Cottrell, Chairman of Dawnay, DayCarpathian PLC said "This acquisition represents the sixth transaction since the£100m secondary fund raising completed in May 2007 and the Company's firstacquisition in Croatia, one of our target countries. This demonstrates thecontinued market expansion of DDC across Central and Eastern Europe, as wecontinue to build a diversified portfolio of quality assets." Enquiries: Dawnay, Day Carpathian PLC Peter Klimt 020 7834 8060 Paul Rogers Cardew Group Tim Robertson 020 7930 0777 Catherine Maitland Notes to Editors DDC listed on the AIM market in July 2005 and raised new funds to create ageared €1 billion portfolio of retail properties. To date, the Company haspurchased four shopping centres in Poland, the Antana Warehouse Park in Hungary,the Varyada Shopping Centre in the Czech Republic, the Promenada Shopping andBusiness Centre in Poland, the Plaza Portfolio of four shopping centres inHungary, Macro Mall shopping centre in Brasov, Romania, Babilonas shoppingcentre in Panevezys, Lithuania, three retail developments at Cluj, Arad and BaiaMare in Romania, and the MID portfolio across Hungary and the Czech Republic. This information is provided by RNS The company news service from the London Stock Exchange