CBX.L Regulatory News (CBX)

7 Feb 2006 07:01

Cubus Lux plc07 February 2006 Cubus Lux Plc Acquisition of Plava Vala d.o.o Placing of 10,250,000 new Ordinary Shares of 1p each at 10p per share Admission of the Enlarged Issued Share Capital to trading on AIM Notice of Extraordinary General Meeting Nominated Adviser and Broker: Corporate Synergy The Company is pleased to announce that it has conditionally agreed to acquirethe entire issued share capital of Plava Vala, which owns a licence to build andoperate a marina under the brand name Olive Island Marina, on the island ofUglijan, Croatia. The Independent Directors regard the Marina as an additionalfit for the Company's existing business and future strategy of becoming thepre-eminent tourism and leisure business in Croatia. The consideration for the Acquisition is to be satisfied by the issue of35,000,000 new Ordinary Shares at 10 pence per share to the Vendor who shallhold such shares as trustee on behalf of the Covenantors in equal proportions.In connection with the Acquisition, the Company is also proposing to raise£1,025,000 (before expenses) at 10 pence per share pursuant to the Placing, theproceeds of which will be used to provide the Company with additional workingcapital for its existing casinos and to help implement the future strategy ofthe Enlarged Group. The size of Plava Vala in relation to the Company means that the Acquisition isconsidered to be a "reverse takeover" for the purposes of the AIM Rules.Accordingly, the Acquisition is conditional on the prior approval of theShareholders. In addition, Gerhard Huber and Christian Kaiser, who areshareholders in Cubus, both have a beneficial interest in Plava Vala. GerhardHuber and Christian Kaiser are also Executive Chairman and proposed ChiefOperating Officer in Cubus respectively. As such, the Acquisition is a relatedparty transaction (as defined) under the AIM Rules. Gerhard Huber, Chairman of Cubus Lux Plc, commented: "This acquisition and placing sets us on our way to achieving our goal ofbecoming the pre-eminent tourist and leisure business in Croatia. Theadditional funds will allow us to develop both this and future marinas as welldriving the existing casino business by carrying out junket marketinginitiatives. In addition, we have identified further leisure opportunities suchas hotels and golf courses and we have already started work on a proposal toestablish one of the first golf resorts in Croatia. The influx of visitors from wealthier Western European countries and NorthAmerica into Croatia has created enormous demand and we believe that there is ahuge opportunity to develop a substantial tourist and leisure business." Cubus Lux PlcGerhard Huber, Chairman 07900 683 683 Corporate SynergyOliver Cairns 020 7448 4400 Threadneedle Communications 020 7936 9605Graham Herring/Alex White 07793 839 024 EXPECTED TIMETABLE OF PRINCIPAL EVENTS Publication of the Admission Document 6 February 2006Extraordinary General Meeting 10.30 a.m. on 3 March 2006 Completion of the Acquisition 6 March 2006 Admission effective and commencement of dealings on AIM in theNew Ordinary Shares 6 March 2006 ADMISSION AND PLACING STATISTICS Placing Price 10 pence Number of Ordinary Shares currently in issue 22,102,001 Number of Consideration Shares being issued pursuant to theAcquisition 35,000,000 Number of Placing Shares being placed on behalf of the Company 10,250,000 Number of Ordinary Shares in issue at Admission 67,352,001 Market capitalisation at Admission at the Placing Price £6,735,200 BACKGROUND TO AND REASONS FOR THE ACQUISITION Cubus currently operates three casinos in Croatia, where it is the secondlargest casino operator. Whilst the Directors believe there is furtheropportunity for the Company to grow in the casino market in Croatia, they havefelt for some time that the Company needs to expand into other tourism andleisure sectors. To this end, they have been identifying opportunities todiversify Cubus' existing business away from casinos in order for the Company toachieve its goal of being the pre-eminent tourism and leisure business inCroatia. On 19 July 2005, Gerhard Huber was appointed Executive Chairman of the Company,bringing with him 4 years' experience of tourism and leisure in Croatia. He andChristian Kaiser, the Proposed Director, have been involved with the developmentof Plava Vala for 3 years. Olive Island Marina is situated on the island of Uglijan, approximately 4 milesfrom the city of Zadar. Zadar is the capital of Northern Dalmatia and along withits international airport, it offers numerous restaurants and cafes, cinemas,theatres, galleries, libraries, museums and sports centres. Zadar isapproximately one and a half hours north of Split by car. A newly built highwaybetween Split and Zadar opened in summer 2005, further developing theinfrastructure in the region. The capacity of Olive Island Marina will be approximately 200 berths during aninitial development period, which the Directors believe will become operationalby June 2006. In addition, it is anticipated that another 100 berths (subject tofinal approval and planning) will be added by the end of 2007. All the marinaberths will be equipped with modern facilities. Plava Vala has been offered an 8year term loan facility by Erste & Steiermaerkische Bank d.d. for the purpose offunding the construction works required to complete the Marina and to refinanceits existing working capital facilities. The Directors believe that uponacceptance of such loan facility, sufficient funding will be in place (subjectto conditions precedent) to complete the Marina project. Plava Vala is also co-operating with a Croatian property development company,Duboko Plavetnilo d.o.o., which is involved in the development of a largeproperty project on Uglijan to build a resort consisting of 300 apartments, 100villas and 1 hotel, bringing a total of 2,100 beds. The Directors believe theMarina will complement the hotel and apartment/villa offering of DubokoPlavetnilo, as well as being able to generate business through them. The Independent Directors believe that once fully operational, the Marina willenhance the results and value of the Enlarged Group. INFORMATION ON THE GROUP Background Cubus d.o.o., a wholly-owned subsidiary of the Company, was originally granted a10 year concession agreement for organising games of chance in gaming-houses on20 January 2000. Cubus, following the acquisition of Cubus d.o.o., was admittedto AIM on 23 August 2004. The Casinos Cubus currently has agreements to operate three annual casinos in hotels inCroatia, covering in aggregate over 16,000 sq ft. Hotel Histria, Pula Cubus' first operation was the annual casino operated in the Hotel Histria inPula, located at the southern end of the Istrian Peninsula. Hotel Histria issituated in a good location, raised above the sea coast, only four kilometresaway from the historic centre of Pula. It is open all year round, with 240 roomson five floors. The casino, which has recently been refurbished, occupies 7,500sq ft. and has 60 slot machines and 8 gaming tables. The games offered areAmerican Roulette, Baccarat, Blackjack, Poker, Punto Banco and Roulette. Belvedere Hotel, Medulin The Belvedere Hotel is located in Medulin, also on the Istria Peninsula, and has450 rooms. This site was opened on 11 September 2004 and operates all yearround. The Belvedere is situated by the coast facing the sea in the small townof Medulin, ten kilometres away from the centre of Pula. The casino, whichoccupies 3,200 sq ft., has 29 slot machines and 7 gaming tables. The gamesoffered are Blackjack, Electronic Roulette, Poker and Roulette. Narcis Hotel, Rabac On 11 July 2005, Cubus announced the opening of its third casino. The thirdcasino is located in the Narcis Hotel in Rabac, which lies approximately 30miles north east of Pula. Cubus entered into a 3 year agreement to operate thecasino complex at the Rabac Hotel, with an option for an additional 3 yearextension. The hotel complex has more than 670 rooms and is fully occupiedduring the summer season. Adjacent to the hotel is a caravan park with 3,000camping places. The complex stretches over 200,000 square metres. The casinooccupies 5,900 sq ft. and has 32 slot machines and 6 tables, offering AmericanRoulette, Blackjack and Poker. Financial Information The Company's trading in 2004 was disappointing, as it had not been possible toincrease the level of business at the Company's two existing casinos. For thesix months ending 30 June 2005, the Group reported revenues of £191,000 and anet loss of £168,000. Revenues were 14 per cent. ahead of the correspondingperiod in 2004, but were more than offset by higher expenses, reflecting theaddition of the third casino and the effect of being listed on AIM, resulting ina doubling of the pre-tax loss. Whilst the results for the six months ended 30June 2005 seem relatively poor compared to prior year, the Croatian casinomarket is a seasonal business and this period historically contains five of theworst six months of the year. Adjusting for seasonality, the Directors believethat the Company's results for the six months to 30 June 2005 have beenapproximately in line with the prior year. The Company aims to improve trading through an operational restructuring and byfocussing on developing marketing arrangements with junket operators to bringhigh income players into the casinos. Current trading and prospects Cubus' casino trading and prospects are subject to Croatian tourism and gamingresults. The Directors expect an increased traffic of tourism as a result ofimproved infrastructure in the region as Croatia becomes an ever more populardestination resort. Management has begun aggressively implementing its new marketing strategy, thesuccess of which the Directors anticipate will be reflected in the gamingresults. The strategy includes the recruitment of a new sales and marketingmanager who will oversee the development of alliances with junket organisers inItaly, Russia, Israel and the United Kingdom; co-operation with expert touroperators for other European clientele coming to Croatia; exploring thepossibility of franchising or joint venturing with other local partners; andother efforts for the domestic market which may include tournaments, and theconversion of the casino bars into sport bars. INFORMATION ON PLAVA VALA AND OLIVE ISLAND MARINA Introduction Olive Island Marina is situated in Sutomiscica on the island of Ugljan which isapproximately 4 miles from the city of Zadar. The 3,000-year-old city of Zadaris the capital of Northern Dalmatia and along with its international airport, itoffers numerous restaurants and cafes, cinemas, theatres, galleries, libraries,museums and sports centres. Ugljan is considered to be a suburb of Zadar owing to its frequent travelconnections. It is approximately 30 minutes from Zadar and serviced by regularferry lines. Ugljan has a mild and healthy Mediterranean climate, with anaverage air temperature from May to October of 22degreesc, and 2,500 sun hoursregistered annually. In September 2004, Plava Vala obtained a concession from the Government of theRepublic of Croatia to build and operate Olive Island Marina. Plava Vala iscurrently developing an initial phase with approximately 200 marina berths whichare expected to become operational by June 2006. Additionally, Plava Vala isalso planning to add approximately 100 more berths to the Marina (subject toapproval and planning) in a second phase to be completed towards the end of2007. Plava Vala has been offered an 8 year term loan facility by Erste &Steiermaerkische Bank d.d. for the purpose of inter alia, funding theconstruction works required to complete the Olive Island Marina and theanticipated official opening of Olive Island Marina is scheduled for May 2006,in time for the peak tourist season. All the marina berths will be equipped with modern facilities. Olive IslandMarina will be open the whole year and will initially provide the followingrange of services; • reception;• restaurant;• bar;• swimming pool;• grocery shop;• chandlery;• repair facilities, including a mobile hoist;• wireless LAN internet access;• web cam surveillance system; and• direct private ferry to/from Zadar city. Market background There are currently 48 marinas with concessions in Croatia, with a total ofapproximately 15,780 berths available for rent. The majority of these marinasare owned by the state controlled company, ACI Marinas, and many havesub-standard facilities. The Directors believe that there are currentlyapproximately 4 marinas in Croatia which have international standard facilities.By developing the Marina to this standard, the Company is aiming to attracthigher spend customers with larger and better quality boats. In turn, theDirectors believe this will help develop the Marina as an entertainment venuefor tourists. Owing to the beautiful Croatian coastline, sailing is currently one of the mostattractive and prosperous forms of Croatian tourism. The number of touristarrivals and nights spent in nautical ports has been steadily growing over thepast years. In 2003, the number of tourists in marinas rose by 11 per cent. andthe number of overnight stays increased by 14 per cent. compared to the previousyear. 2004 showed an increase of 13 per cent. in tourist arrivals and 12 percent. in overnight stays. Nautical tourists accounted for 9 per cent. Of thetotal number of tourists visiting Croatia in 2004 (source: Central Bureau ofStatistics). Among the 140 operating charter companies, turnover is believed to haveincreased by 30 per cent. Between 2003 and 2004. Within Croatia, the county ofZadar has posted the strongest growth rate in tourist overnight stays innautical ports in 2004, and has shown an increase of 50 per cent. from 2003 inthe total number of tourists visiting its ports (source: Central Bureau ofStatistics). Key Strengths The Independent Directors believe the Marina has the following key strengths: • The Marina will have international standard marina facilities which arescarcely available in Croatia; • The Marina will have a wide range of facilities such as restaurants, bars anda swimming pool, enabling a full provision of services; • Berth rental revenue will be paid in advance for the entire year for annualleases. This allows the Marina to achieve substantial additional revenue fromsecondary rental of annually rented, but unused, berths; • Plava Vala has obtained a 32 year concession from the Government to operatethe Marina; • Many of the marinas in Croatia are oversubscribed. For example, the marina inPula, which is vastly inferior in terms of facilities to the proposals at OliveIsland Marina, has a minimum five year waiting list to secure an annual berth;and • The Marina already has a management team experienced in marine and businessactivities in Croatia. Financial record, current trading and future prospects The Marina is due to begin operating in May 2006 and the Independent Directorsare confident of its prospects for its first season in operation. Uponacceptance and full drawdown of the loan facility offered by Erste &Steiermaerkische Bank d.d., no further funds from the Company should be requiredto complete the construction of the Marina and to bring the Marina to theoperational stage. The Marina has received a substantial number of enquiries for annual bookingsover the past 8 months, without having incurred large marketing expenses. Formalmarketing for the Marina's business commenced during the Dusseldorf Boat Show inJanuary 2006. In order to increase the awareness of the Marina within the boating community,28 sea berths with buoys were installed within the area of the Marina concessionover the summer of 2005. These buoys have had a utilisation rate ofapproximately 30 per cent. throughout the summer which was in line with theDirectors' and the Proposed Director's expectations, considering that nospecific marketing was undertaken and there are currently no facilities at thesite. FUTURE STRATEGY Cubus' strategy is to become the pre-eminent tourist and leisure business inCroatia. The Directors intend to achieve this through: • the development of the existing and future marinas; • undertaking junket marketing initiatives to increase the profitability of theCompany's casinos, which if successful, will lead to the opening of furthercasinos in the future; and • identifying other leisure opportunities such as hotels and golf courses. TheDirectors have already begun to work on a proposal to establish one of the firstgolf resorts in Croatia. A 220 hectare site has been identified and theDirectors anticipate the expected project will encompass two 18 hole golfcourses, a village with approximately 300 apartments and 100 golf chalets and ahotel with approximately 300 room. Approximately €400,000 of the proceeds of thePlacing will be used to progress the development of this golf resort. The Directors and the Proposed Director believe that their collective experiencein the tourist and leisure industry, combined with skills in the areas offinance and management, provide a solid platform to implement the Company'sbusiness strategy successfully. DETAILS OF THE ACQUISITION The Company has conditionally agreed to acquire the entire issued share capitalof Plava Vala pursuant to the Acquisition Agreement. The consideration for the Acquisition is to be satisfied by the issue, creditedas fully paid, of 35,000,000 new Ordinary Shares at 10 pence per share to theVendor. The Independent Directors have received two independent reports addressing thevaluation of Plava Vala and believe the consideration payable is fair andreasonable. The Consideration Shares will rank pari passu in all respects with the ExistingOrdinary Shares. The size of Plava Vala in relation to the Company means that the Acquisition isconsidered to be a "reverse takeover" for the purposes of the AIM Rules.Accordingly, the Acquisition is conditional on the prior approval of theShareholders. In addition, Gerhard Huber and Christian Kaiser, who areshareholders in Cubus, both have a beneficial interest in Plava Vala. GerhardHuber and Christian Kaiser are also Executive Chairman and proposed ChiefOperating Officer in Cubus respectively. As such, the Acquisition is a relatedparty transaction (as defined) under the AIM Rules. The Acquisition is conditional, inter alia, on: • the passing at the EGM of Resolution 4, details of which can be found below; • the Placing Agreement becoming unconditional (save for Admission) and nothaving been terminated in accordance with its terms prior to Admission; and • Admission. DIRECTORS Brief biographical details of the Directors and the Proposed Director are setout below. Directors and Proposed Director: Gerhard Huber (46), Executive Chairman Gerhard Huber graduated with a JD from law school at the University of Salzburgand degree in business administration from the University of Vienna, both inAustria. He then joined the Management Consulting department of KPMG, nowBearing Point, working in the Frankfurt, Tokyo, New York and Paris offices,focusing on retail and investment banking. In 1991 he became chief operatingofficer of Bankhaus Maffei & Co, a private banking subsidiary of BayerischeHypo-und Wechselbank in Munich, the then second largest bank in Germany. Workingin the Hypo-Group he established DAB Bank, Europe's first discount brokertrading at the Frankfurt stock exchange. In 1995 he moved to London to head upFidelity Brokerage's European retail and financial intermediary unit. A founderof enba plc, the European internet bank, he served as its chairman and chiefexecutive officer until the sale to Banco Bilbao Vizcaya Argentaria, S.A. in2000. Since then he has been involved in Croatian real estate projects as wellas in various early stage investments. Michael Janssen (39), Non-Executive Director Michael was co-founder of Brokat AG, a software company in the area of onlinefinancial services, and acted as its chief financial officer from 1996 until2001. Within Brokat he arranged the company's financing and was responsible forthe execution of several venture capital transactions. He also was responsiblefor the company's IPO on the Neuer Markt and for its listing on NASDAQ. In 2002Michael founded Auxell GmbH, a private equity investment and consulting firm.Auxell invests, together with international partners, in early stage privatecompanies. Michael is an Associate Partner of the European Venture Capital FirmMangrove Capital Partners, based in Luxembourg. He also acts as a GeneralPartner for MEGU Capital, Ireland. Leon Nahon (67), Non-Executive Director Mr Nahon qualified as a Chartered Accountant in 1961 and after working for twoother firms, he was admitted as a partner of Levy Gee in 1967. He helped to growLevy Gee from a 10-person practice to a top 20 accounting practice in the UnitedKingdom. In 1980 he was appointed a director of the International Group ofAccounting Firms and was subsequently President for three years. He was alsosenior partner of Levy Gee from 1995 to 2001. He has had significant experiencein the gaming industry throughout his career. He works at Vantis Numerica LLPand will oversee the financial affairs of the Enlarged Group until theappointment of a Finance Director. Eli Abramovich (41), Non-Executive Director Mr Abramovich is the founder and Chairman of the UK magazine "Casino WorldMagazine". He has over 20 years of experience in gaming operations and from 1992to 1998, he was employed by Valo Management as operations director supervisingcasinos in Eastern Europe, Africa and Turkey. From 1988 to 1996, he was employedby three different casinos in Turkey as marketing director and general manager.Since 1999, he has also acted as a consultant to land based and online casinos. Haggai Ravid (45), Non-Executive Director Mr Ravid is a managing partner with Cukierman & Co, an investment banking firmbased in Tel Aviv, Israel and has several years experience in investment bankingand international activities. From 1999 to 2003, he was a partner at MBIPartners, an investment banking firm. From 1993 to 1999, Mr Ravid acted throughTwin Triangle Financial Group, in Beverly Hills, California, where he providedassistance to hi-tech companies. From 1990 to 1993, he was employed by BankLeumi in Los Angeles as a banking officer and a member of the credit committee. Christian Kaiser (43), Proposed Chief Operating Officer Mr Kaiser has an MA from Vienna University and received a Rotary Internationalscholarship to attend Hong Kong University's MBA program. Following this, he setup the office of a unit trust administration company in Hong Kong. He laterjoined Bank Austria to head up their global project and structured financepractice. After this, he became Head of New Business Development for FidelityBrokerage where he was responsible for the expansion of the direct brokeragebusiness into Europe. One of the original founders of enba plc and responsiblethere for the European business, he most recently was chief executive officer offactor-e plc. factor-e plc was the technology company of the enba group ofcompanies responsible for the development and distribution of Customer ServiceManagement (CSM) software and secure e-mail applications as well as e-bankingand e-brokerage applications. Christian currently is involved in private equityinvestments in the technology, property and leisure industries. He is also abeneficial owner of Plava Vala d.o.o.. Following Admission, Christian willbecome Chief Operating Officer of the Enlarged Group. Current directorships/partnerships:Bancorp Plc (Dublin, Ireland)enba Brokers Ltd (Dublin, Ireland)factor-e plc (Dublin, Ireland)first-e Group plc (Dublin, Ireland)TracTechnology ab (Sweden) Past directorships/partnerships:Phoenix Holdings Investment Ltd(Jersey, Channel Islands) Regarding disclosures for Christian Kaiser no further details are required asper Schedule 4 of the AIM Rules. DETAILS OF THE PLACING The Company is proposing to raise £1,025,000 (before expenses) by way of aconditional placing of 10,250,000 new Ordinary Shares at 10 pence per share byCorporate Synergy. The Placing Shares will represent approximately 15.97 percent. of the Enlarged Share Capital at Admission. The Placing is not underwritten. The Placing Shares are or will be in registeredform and will, when issued and fully paid, rank pari passu in all respects withthe Existing Ordinary Shares, including the right to receive all dividends andother distributions thereafter declared, made or paid on the Ordinary Shares. The Placing Shares have not been marketed in whole or in part to the public inconjunction with the application for Admission. Leon Nahon has indirectly subscribed for 500,000 Placing Shares in aggregate. The proceeds of the Placing will be used to provide additional working capitalfor the existing casinos and to help implement the future strategy of theEnlarged Group. The Placing is conditional on, inter alia: • the passing of the Resolutions; • the Acquisition Agreement and the Placing Agreement each becomingunconditional (save for any condition relating to Admission) and not beingterminated in accordance with their respective terms prior to Admission; and • Admission occurring no later than 8.00 a.m. on 6 March 2006 (or such latertime and/or date, being not later than 3.00 p.m. on 31 March 2006, as CorporateSynergy and the Company may agree). ADMISSION TO AIM Application will be made to the London Stock Exchange for all of the ExistingOrdinary Shares, the Placing Shares and the Consideration Shares to be admittedto trading on AIM. Admission is expected to become effective and trading in theOrdinary Shares is expected to commence on 6 March 2006. EXTRAORDINARY GENERAL MEETING In view of its size, the Acquisition is conditional on the approval ofShareholders. The EGM will be held at the offices of Speechly Bircham, 6 StAndrew Street, London EC4A 3LX, at 10.30 a.m. on 3 March 2006, at whichresolutions will be proposed to: 1. increase the authorised share capital of the Company in order to providesufficient authorised share capital for, inter alia, the Placing and theAcquisition; 2. grant the Directors and Proposed Director authority to allot OrdinaryShares pursuant to section 80 of the Act in connection with the Acquisition, thePlacing and generally; 3. dis-apply statutory pre-emption rights upon the issue of Ordinary Sharesfor cash pursuant to the Placing and up to an aggregate nominal amount of£500,000; 4. approve the proposed Acquisition for the purposes of the AIM Rules; and 5. adopt new articles of association for the Company. Copies of the Admission Document will be available for inspection during normalbusiness hours on any weekday (Saturdays and public holidays excepted) at theregistered office of the Company and at the offices of Speechly Bircham at theaddress above. RECOMMENDATION The Independent Directors, who have been advised by Corporate Synergy, considerthe Proposals to be fair and reasonable and in the best interests of the Companyand the Shareholders as a whole. In providing advice to the IndependentDirectors, Corporate Synergy has taken account of the Directors' commercialassessments. The Acquisition constitutes a related party transaction for the purposes of theAIM Rules. The Independent Directors, having consulted with Corporate Synergy,consider that the terms of the Acquisition are fair and reasonable insofar asthe Shareholders are concerned. DEFINITIONS AND GLOSSARY The following definitions apply throughout this announcement, unless the contextrequires otherwise: "Acquisition" the proposed acquisition by the Company of Plava Vala pursuant to the Acquisition Agreement "Acquisition Agreement" the conditional agreement dated 6 February 2006 between the Vendor (1), Cubus (2) and the Covenantors (3) relating to the Acquisition "Act" the Companies Act 1985, as amended "Admission" admission of the Enlarged Share Capital to trading on AIM becoming effective in accordance with Rule 6 of the AIM Rules "AIM" the market of that name operated by the London Stock Exchange "AIM Rules" the rules governing the admission to, and operation of, AIM published by the London Stock Exchange, as amended from time to time "Board" the board of directors of the Company for the time being, including a duly constituted committee of the Board "Company" or "Cubus" Cubus Lux Plc "Consideration Shares" the 35,000,000 new Ordinary Shares proposed to be issued pursuant to the Acquisition "Corporate Synergy" Corporate Synergy Plc, nominated adviser and broker to the Company "Covenantors" Gerhard Huber, Christian Kaiser and Milan Kotur "CREST" the computer based system and procedures which enable title to securities to be evidenced and transferred without a written instrument and which is operated by CRESTCo "Cubus d.o.o." Cubus Lux d.o.o., a company duly incorporated and existing under the laws of the Republic of Croatia and the principal operating subsidiary of the Company "Enlarged Group" the Company and its subsidiaries following completion of the Acquisition "Enlarged Share Capital" the issued share capital of the Company at Admission as enlarged following completion of each of the Acquisition and the Placing "Existing Ordinary Shares" the 22,102,001 Ordinary Shares in issue at the date of this document "Form of Proxy" the form of proxy enclosed with this document for use by Shareholders in connection with the EGM "Gaming Licence" the gaming concession awarded by the Government of the Republic of Croatia to Cubus d.o.o. on 30 December 1999 and the concession agreements entered into by and between the Ministry of Finance of the Republic of Croatia and (i) Cubus d.o.o on 20 January 2000 with annexures thereto dated 24 November 2003 and 8 September 2004 (Hotel Histria) and (ii) Cubus d.o.o dated 8 September 2004 (Hotel Belvedere) and (iii) Cubus d.o.o dated 29 June 2005 with annex thereto dated 18 July 2005 (Hotel Narcis) "Group" the Company and its subsidiaries "HRK" Kuna, the lawful currency of The Republic of Croatia "Independent Directors" Michael Janssen, Leon Nahon, Eli Abramovich and Haggai Ravid "London Stock Exchange" London Stock Exchange plc "Marina Licence" the resolution of the Government of the Republic of Croatia on Grant of Concession of the Maritime Property with Purpose of Construction and Commercial Utilisation of the Port of Special Purpose - Port of Nautical Tourism Sutomivs'cica dated 2 September, 2004 (Official Gazette of the Republic of Croatia No. 126/04) "New Ordinary Shares" the Consideration Shares and the Placing Shares "Official List" the list maintained by the Financial Services Authority "Olive Island Marina" or the yachting marina to be constructed on the"Marina" Property and operated by the Company under the brand name of "Olive Island Marina" "Ordinary Shares" ordinary shares of 1p each in the capital of the Company "Placing" the conditional placing by Corporate Synergy on behalf of the Company of the Placing Shares pursuant to the Placing Agreement "Placing Agreement" the conditional agreement dated 6 February 2006 between the Company (1), the Directors and the Proposed Director (2), and Corporate Synergy (3) relating to the Placing "Placing Price" 10p per share, being the price at which each Placing Share is to be issued "Placing Shares" the 10,250,000 new Ordinary Shares which are to be issued pursuant to the Placing "Plava Vala" Plava Vala d.o.o., a company duly incorporated and existing under the laws of the Republic of Croatia under centralised number 110002242, whose registered office is at Obala kneza Trpimira 33, HR-23 000 Zadar, Republic of Croatia "Property" the land plot no. 7653/1 entered with the Land Registry sheet no. 577 of Cadastal Municipality, Sutomivs' cica, Island of Uglijan, Croatia "Proposals" the Acquisition, the Placing and Admission "Proposed Director" Christian Kaiser "Registrars" Capita IRG Plc "Regulations" the Uncertificated Securities Regulations 2001 (SI 2001/3755) "Resolutions" the resolutions of the Company set out in the Notice of Extraordinary General Meeting at the end of this document "Shareholders" holders of Ordinary Shares "UK" or "United Kingdom" the United Kingdom of Great Britain and Northern Ireland "Vendor" Milan Kotur - ends - This information is provided by RNS The company news service from the London Stock Exchange