Last checked at 1 Mar 2012 14:30
Date: | 01 March 2012 |
On behalf of: | Carpathian PLC ("Carpathian", the "Company" or the "Group") |
For immediate release |
Carpathian PLC ("Carpathian" or the "Company")
Potential Sale of Interest in the Galleria Shopping Centre, Riga
The Board of Carpathian Plc, the commercial property investment company formed to focus on retail properties within Central and Eastern Europe, announces the potential sale of its interest in the Galleria shopping centre in Riga, Latvia.
On 15th February 2012, Carpathian entered into an option agreement enabling the majority shareholder of the project's joint venture partner Titan Invest AS ("Titan") to purchase the Company's interests, being held primarily via the Company's 80% shareholding of SIA Patollo, plus ancillary entities.
The purchase notice under this option agreement has now been served upon the Company, obligating both parties to complete the transaction by 20th March 2012.
The transaction, once completed, is expected to produce net equity proceeds before sale costs of €2.3 million implying a gross value for the Company's 80% shareholding in SIA Patollo of €56.4 million including all loans.
SIA Patollo is not consolidated in the Company's results as it is a joint venture partnership and Carpathian does not have majority management control. The potential sale would result in a decrease of net liabilities of the Group of approximately €6 million in addition to the net equity proceeds realised which will reflect costs including Sales Commission of 1% and the DCP of 25%.
A condition of the purchase option agreement also required the purchaser to contribute a further funding to the project of €900,000 which has now been invested. This funding enables certain asset management initiatives enhancing the property. In the event of any failure to complete the purchase, this investment remains as a loan to the project attracting an interest rate of 5% p.a. for the benefit of the lender.
Additionally, should the purchaser fail to complete the transaction, the mutual pre-emption and drag rights currently in the joint venture shareholder agreement are suspended against Titan for 12 months.
The sale of Galleria, Riga would leave the land site in Baia Mare, Romania as Carpathian's final remaining property asset. Work is ongoing to liquidate all interests, including post completion interests, with positive outcomes expected prior to the application for de-listing and liquidation of the Company itself during the course of 2012.
The Company will make further announcements as appropriate in due course.
-Ends-
Enquiries:
Carpathian PLC | |
Rory Macnamara, Non-executive Chairman | Via Redleaf Polhill |
CPT LLP | 020 7529 6413 |
Paul Rogers/Balazs Csepregi | ir@carpathianam.com |
Collins Stewart Europe Limited |
020 7523 8350 |
Bruce Garrow | |
Redleaf Polhill | 020 7566 6720 |
Henry Columbine / Luis Mackness | carpathian@redleafpolhill.com |
Notes to Editors:
- | Carpathian was created in 2005 for the purpose of investing in Central and Eastern European commercial real estate. |
- | 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 remaining core portfolio of assets and transactions within Central and Eastern Europe. |