Alpha Real Regulatory News (ARTL)

18 Apr 2008 07:00

Alpha Tiger Property Trust Limited18 April 2008 18 April 2007 Alpha Tiger Property Trust Limited BUSINESS PARK DEVELOPMENT IN NOIDA (INDIA) - CONFIRMATION OF FIRST AND SECONDCLOSING AND CONSTRUCTION UPDATE Further to the announcement by Alpha Tiger Property Trust Limited (the "Company"or "Alpha Tiger") on 3 December 2007 regarding the successful execution of anagreement with Logix Group to acquire a 74 per cent. equity interest in abusiness park project ("Logix Technova") in Noida, in the NCR (near Delhi,India) for an estimated gross purchase price of INR 1,005 million (£13.1million), the Board of Alpha Tiger are now pleased to confirm that the first andsecond stages of the transaction have completed and construction on site hascommenced and is on schedule. First & Second Closing The conditions precedent for first and second closings have been fulfilled andthe Company has paid a total consideration of INR 400 million (£5.2 million)predominantly in return for Fully Convertible Debenture ("FCD") instruments witha coupon rate of 13.56 per cent. compounded annually and also for an initialnominal 5 per cent. equity interest in Vipul IT Infrasoft Private Limited ('Vipul'), a Special Purpose Vehicle incorporated for the purposes of holding anddeveloping the land. These FCDs (together with accrued interest thereon) shallcompulsorily convert into equity in Vipul by December 2009 (or, if earlier, whenover 90 per cent. of the leasable area is contracted to prospective tenants), atwhich time Alpha Tiger shall complete the transaction and beneficially own 74per cent. in aggregate of Vipul by paying the balance of the gross purchaseprice of approximately INR 605 million (£7.9million). Development The total land area at the site is 20,240 square metres with permissible groundcoverage of 30 per cent.. The proposal is to develop approximately 575,000square feet of leasable business park and other support facilities via thedevelopment of two towers of eight levels each connected by a central core. Thedevelopment includes two levels of underground car parking allowing for over 800car spaces. One of the key conditions precedent to the second closing referred to above wasthe receipt of certain statutory approvals and permits to commence constructionon site. These have been received and construction personnel are now on sitecommencing excavation work and the installation of surface water drainage.Construction is estimated to be completed in phases with the final phase due tocomplete by December 2009. Brad Bauman, Fund Manager, commented "Development progress on this world classbuilding confirms Alpha Tiger's aim to deliver occupational solutions forinternational tenants and benefit from its first mover advantage in thisdeveloping business park location within one of India's most dynamic locations." An exchange rate of £1 = INR 77 is used in this announcement. Contact: Alpha Tiger Property Trust Limited David Jeffreys, Chairman, Alpha Tiger +44(0)1481 723 450 Brad Bauman, Alpha Tiger Fund Manager +91(0) 9980 001122 Panmure Gordon, Nominated Adviser to the Company Richard Gray/Andrew Potts/Stuart Gledhill +44(0)20 7459 3600 Notes to Editors: Further information on the transaction Transaction Structure Alpha Tiger will ultimately acquire a 74 per cent. equity interest in Vipul,with an estimated gross purchase price to be paid by the Company of INR 1005million (£13.1 million). Consideration will be satisfied using the existing cashresources of the Company. The key terms of the investment are as follows: Stage 1 & Stage 2: • Certain conditions precedent have been satisfied and Alpha Tiger hasacquired a 5 per cent. equity interest in Vipul for a nominal sum and hasadditionally subscribed for FCDs, such FCDs accruing a fixed coupon of 13.56 percent. compounded annually. Payment of accrued interest in respect of the FCDs isin the form of a bullet payment to be converted into equity at completion ofStage 3. This initial capital subscription will be utilised by Vipul to commenceconstruction. • Vipul has arranged a third party loan facility to fund the proposedconstruction of the business park. The land is provided as security against theloan facility. Any shortfall in funding in excess of the loan facility tocomplete the construction project is the exclusive responsibility of Logix andany such shortfall in funding will be provided as a subscription for new (nonvoting) equity. Stage 3 - Completion - expected before December 2009 • Alpha Tiger shall convert the FCDs and accrued coupon into equity andpurchase a further equity interest after: (a) 24 months from the exchange ofbinding contracts or, at the option of Logix, (b) when over 90 per cent. of theleasable area is contracted to prospective tenants. The completion mechanism forthe purchase of further equity will be as follows: o The asset value of Vipul shall be calculated by capitalising at apre-agreed discount rate the annualised rental profits and the net profit ofother ancillary income of Vipul; o The net asset value ("NAV") of Vipul shall be calculated by deductingfrom the asset value calculated above any tenant security deposits and any otherliabilities (including the third party debt secured on the company). Based onthis NAV, Alpha Tiger shall acquire an additional equity interest in Vipul toequate to an aggregate 74 per cent. voting and economic equity interest. Suchincremental consideration shall be the residual balance after the deduction ofthe FCDs' principal amount and the accrued interest from 74 per cent. of thecalculated NAV; o Further to the completion mechanism, Alpha Tiger shall own 74 percent. and Logix shall own 26 per cent. of the voting and economic rights ofVipul. About Alpha Tiger Property Trust Limited Alpha Tiger is a Guernsey registered closed-ended investment company investingin and developing Indian real estate, focusing on business parks and businesspark-led mixed use property. The Company is listed on AIM. Further information is available at www.alphatigerpropertytrust.com This information is provided by RNS The company news service from the London Stock Exchange