Last checked at 6 May 2011 07:00
Date: | 06 May 2011 |
On behalf of: | Carpathian PLC ("Carpathian", the "Company" or the "Group") |
Embargoed until: | 0700hrs |
Carpathian PLC
Investment Update
The Board of Carpathian PLC (AIM: CPT) is pleased to announce the completion of the sale of the Promenada Shopping Centre. The buyer is MD Poland I Sp z o.o, a subsidiary of Atrium European Real Estate Limited, one of the leading real estate companies focused on shopping centre investment, management and development in Central and Eastern Europe.
Promenada is located in Warsaw, Poland and comprises a shopping and leisure centre of 43,528 sq m of lettable space. Additionally, it also has 12,058 sq m of office accommodation.
The completion price was at a headline figure of €169.5 million, with an additional €1.5 million payable upon recovery of VAT by Atrium. The VAT recovery is expected to be received within three months - a positive tax ruling supporting the VAT recovery having been received last month. The headline price was subject to a net deduction of €1 million arising principally from payments for insurance and modification of a trademark licence being made from the sales proceeds.
Upon closing new escrow accounts will be established of €0.6 million. The Company expects to recover the majority of the escrowed funds within six months from closing. The amount paid into escrow is €5.9 million less than previously estimated, resulting mainly from the payment into court by the Company of €2.6 million in February 2011 to discharge an asset pledge that resulted from litigation which predates Carpathian's acquisition of the property. The money will remain in the court account pending settlement or resolution of the litigation.
The property was acquired by Carpathian in two parts in 2006 and 2009 for €144.5 million. The two parts of the property were sold by Savana Torrido Investments and Poldrim Torrido Investments respectively.
€108.1 million of the sales proceeds will be paid to Deutsche Pfandbriefbank AG ("DPB"). €105.1 million will be used to repay the outstanding loan, breakage of the hedging interest and payment of interest to closing in relation to Promenada. In addition, DPB will also hold €0.9 million of the proceeds in escrow against the cross-collateralised indebtedness of the Company's Osowa shopping centre in Gdansk, Poland and €2.1 million against the separate debt facility relating to the Company's Babilonas property in Panevezys, Lithuania.
The Net Closing payment is therefore €59.8 million, before the €1.5 million VAT "Top up".
Following the sale, the NOI earned by the Company will be reduced by approximately €12.0 million per annum.
Jones Lang LaSalle, Salans and BNWW advised Carpathian in relation to the transaction.
The Company intends to review the cash proceeds required to meet its current working capital requirements in the context of the current sales programme and then to distribute as much as possible of these net proceeds to shareholders as soon as practicable in accordance with the previously declared intentions of the Board.
Enquiries:
Carpathian PLC |
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Rory Macnamara, Non-executive Chairman | Via Redleaf Communications |
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CPT LLP | 020 7529 6413 |
Paul Rogers/Balazs Csepregi | ir@carpathianam.com |
Collins Stewart Europe Limited | 020 7523 8350 |
Bruce Garrow |
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Redleaf Polhill | 020 7566 6700 |
Mike Ward | carpathian@redleafpr.com |
Notes to Editors:
- | Carpathian was created in 2005 for the purpose of investing in Central and Eastern European commercial real estate. |
- | Carpathian's primary focus is on shopping centres, supermarkets and retail warehousing in Croatia, the Czech Republic, Hungary, Poland, Romania, Lithuania and Latvia. |
- | Carpathian was admitted to trading on AIM in July 2005. |
- | CPT LLP is the Property Investment Adviser to Carpathian. CPT LLP owns 100% of Carpathian Asset Management Limited ("CAM"). CAM, which was previously owned 50% by the Company, became fully externalised when the Company and CPT LLP implemented the new portfolio management agreement on 1 March 2010. CAM, together with its parent undertaking, CPT LLP, is responsible for managing the core portfolio of assets and transactions within Central and Eastern Europe.
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