Adams Regulatory News (ADA)

2 Jun 2006 07:01

Dawnay, Day Carpathian PLC02 June 2006 DAWNAY, DAY CARPATHIAN PLC2 June 2006 Acquisition of Promenada Shopping and Business Centre for an initial €127 million and Acquisition of the Plaza Portfolio of four shopping centres in Hungary for an initial €61 million Dawnay, Day Carpathian PLC ("DDC" or "the Company"), the retail commercialproperty investment company established to invest in Central and Eastern Europe,is pleased to announce it has completed two further transactions. The first isthe purchase of the Promenada Shopping and Business Centre ("Promenada") inWarsaw, Poland for an initial payment of approximately €127 million. The secondis the purchase of the Plaza Portfolio of four shopping centres ("PlazaPortfolio") in Hungary for an initial payment of approximately €61 million. Commenting on the acquisitions, Rupert Cottrell, Chairman of DDC said: "Theseacquisitions are the first two of a number of exciting transactions that areclose to completion. Promenada is one of the largest single asset deals everconcluded in Poland and adds to the four shopping centres we already own in thecountry. The Company was originally to acquire a 50% share in the Plaza Portfolio so weare extremely pleased to have been able to secure 100% ownership of these fourexcellent retail locations. Importantly, both transactions come with sustainableincome, good growth prospects, and the opportunity to add value through assetmanagement." About Promenada Promenada is a major shopping centre and office complex with a total lettablefloor area of 49,571 sq m. The existing space includes a three level modernshopping gallery, cinema, office space and a multi storey car park. It hasattracted a number of high profile retail tenants including H&M, Zara, Empik,Wallis, Timberland, Sephora, Reserve and Alma foodstore. The average monthly rental yields for retail tenants of Promenda isapproximately €18 per sq m, which is lower than other prime Warsaw schemes. Theinitial yield for the acquisition is approximately 7.0%. There is also potential to extend the centre by a further 5,000 sq m to create anew department store with a gym and offices above. Promenada is estimated byGENI to have the highest core shopping population of all shopping centres inWarsaw and it is the most convenient shopping centre for 350,000 people. Promenada acquisition structure The acquisition has been effected through DDC's purchase of a Luxembourgcompany, Sycamore S.a.r.l. ("Sycamore"), initially incorporated by members ofthe Dawnay, Day Group specifically for the purpose of acquiring the holdingcompany which ultimately owned Promenada. The Company's equity contribution willbe approximately €26 million. As part of the consideration arrangements, Perriniana Limited (a member of theDawnay, Day Group) is also to receive deferred consideration of up to a maximumof approximately €7.3 million (after tax), which would ordinarily be reinvestedin DDC by way of subscription for ordinary shares as disclosed in the Company'sAIM admission document. However, Perriniana has agreed to defer this element ofthe consideration, which would otherwise have been received by it on completionof this transaction, to allow all or part of it to be offset against certainidentified potential liabilities which may be incurred by Sycamore, Promenada ortheir affiliates. In the event that such liabilities do not crystallise, the deferred element ofthe consideration will become due to Perriniana via a put and call optionentitling Petalang to subscribe for ordinary shares in DDC for an aggregateamount equal to the deferred consideration actually received by Perriniana(after tax) at an exercise price of 92.8p per share, being the average closingmid market price of ordinary shares in DDC for the five dealing days immediatelypreceding 31 May 2006. Such options shall become exercisable followingdetermination of the quantum of the liabilities referred to above and earlier incertain circumstances. DDC was advised by King Sturge (Warsaw office) and Colliers have independentlyvalued Promenada for the purposes of this transaction. About Plaza Portfolio The Plaza Portfolio comprises four shopping centres, located in the provincialHungarian towns of Veszprem, Pecs, Sopron and Szombathely, which are in thesouth and western parts of the country, and between 70km and 190km fromBudapest. The four centres provide food store and cinema anchor units with avariety of national, regional and local traders including; McDonalds, Rossman,Cinema City, CBA, Jeans Club, OTP Bank and DM Drogerie. In general, the shoppingcentres are located within or close to the city centres in prominent, easilyaccessible destinations. Many are surrounded by high density residential estatesor commercial properties. The Plaza Portfolio totals approximately 47,000 sq m of net leasable area,consisting of approximately 300 shops and tenants and extensive car parking. Theinitial yield for the acquisition is approximately 9.0%. Plaza Portfolio acquisition structure The acquisition has been effected through DDC's purchase of four Hungarianholding companies from Navidad S.a.r.l., in which members of the Dawnay, DayGroup have an interest, as described in the Company's AIM admission document.The Company's equity contribution for the acquisition is approximately €14million. DDC was advised by King Sturge (Warsaw office) and DTZ haveindependently valued the Plaza Portfolio for the purposes of this transaction. Following completion, members of the Dawnay, Day Group have agreed to reinvestan estimated £2 million in new ordinary shares in DDC, representing proceedsfrom the Plaza Portfolio acquisition. Related Party Transactions Under the AIM rules, both acquisitions have been classified as related partytransactions. Accordingly, the members of the Board of DDC (excluding PeterKlimt who is considered a related party for these purposes), upon consultationwith Numis Securities, the nominated adviser to the Company, consider the termsof the related party transactions to be fair and reasonable insofar as DDC'sshareholders are concerned. Enquiries: Dawnay, Day Carpathian PLC Guy Naggar 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 with a property valuation of €64.5 million inPoland, the Antana Warehouse Park in Hungary valued at €21.0 million and theVaryada Shopping Centre in the Czech Republic valued at €37.0 million. This information is provided by RNS The company news service from the London Stock Exchange