CBX.L Regulatory News (CBX)

13 Mar 2007 10:18

Cubus Lux plc13 March 2007 CUBUS LUX PLC "Cubus Lux" or "the Company" Option to acquire G&P Limited Option to acquire Duboko Plavetnilo Hoteli d.o.o. On 12 March 2007 Cubus Lux, the Croatian leisure and tourism company, enteredinto two option agreements to acquire certain development land known as the"Olive Island Resort" on the coast of Dalmatia in Croatia. The Olive Island Resort development land is set in 400,000sqm of land along1.5km of beach, and is intended to be developed into:- (a) a village resort comprising 431 units, namely 126 villas and 305 apartments as well as the accompanying facilities such as restaurants, shops, offices and a marina (the "Villas Development"); and (b) a 4 star hotel containing 500 beds (the "Hotel Development"). Highlights • Option to acquire Villas Development for €10 million in cash and the issue of 33m ordinary shares in the Company, which may be satisfied at the option of the Company by the issue of ordinary shares credited as fully paid • Option to acquire Hotel Development for €5 million in ordinary shares of the Company • Villas Development and Hotel Development valued at €39m and €5m respectively* * Independent valuation of both operations by UK based surveyors Kings Sturge. Options subject to a number of conditions including the grant of the necessary planning permissions. Haggai Ravid, Director of Cubus Lux, commented: "This is an extremely exciting opportunity for Cubus Lux which represents asignificant evolution in our operations. The Olive Island Resort is an idyllicstretch of land and the resort has already attracted widespread interest. TheVillas and the Hotel are fully synergetic. Pre sales figures have been veryencouraging with units having already been acquired by people across Europe andin the US. In the event that Cubus Lux decides to exercise the Options, we hopethat these investments will prove to be lucrative for Cubus Lux." The option agreement in respect of the Villas Development has been entered intobetween the Company and the shareholders of G&P Limited, a company registered inthe British Virgin Islands. This option agreement provides that the Company mayexercise an option to acquire the Villas Development within 4 months from thedate of the option agreement. Completion of the acquisition of the VillasDevelopment is to proceed as soon as reasonably practicable following theexercise of the option, subject to agreement of the terms of the relevantacquisition agreement. Upon completion of the acquisition of the VillasDevelopment, the Company is obliged to pay €10 million in cash and to issue 33mordinary shares in the Company credited as fully paid. The option agreement in respect of the Hotel Development has been entered intobetween the Company and the shareholders of Duboko Plavetnilo Hoteli doo, aCroatian company. This option agreement provides that the Company may exercisean option to acquire the Hotel Development within 4 months from the date of theoption agreement. Completion of the acquisition of the Hotel Development is toproceed as soon as reasonably practicable following the exercise of the option,subject to agreement of the terms of the relevant acquisition agreement. Uponcompletion of the acquisition of the Hotel Development, the Company is obligedto pay €5 million, which may be satisfied at the option of the Company by theissue of ordinary shares in the Company at a fixed price of 50 pence per share(the "Consideration Shares"). The Option Agreement provides a formula for theissue of warrants over additional ordinary shares exercisable at nominal valuein the event that the market value of the Company's ordinary shares is less than50 pence per share on both the date of exercise of the option and on the date ofthe issue of the Consideration Shares. This warrant formula is intended tocompensate the parties granting the Option in the event that the market value ofthe Company's shares is less than 50 pence at the relevant time. Both option agreements are conditional upon a number of factors, includingcompletion of due diligence to the Company's satisfaction, the agreement of thedetailed terms of acquisition agreements, and the raising of debt or equityfinancing by the Company for at least €10 million. In particular, the Companyunderstands that the parties which have granted the options are in the processof securing consent from the Croatian government to the develop the relevantland, and exercise of the options is subject to such consent having beengranted. In the event that the Company proceeds with the acquisition of the VillasDevelopment and the Hotel Development, then the transaction is expected toconstitute a reverse takeover for the purposes of the AIM Rules, and willtherefore require the issue of an admission document and shareholder approval.In addition, the transaction would be considered to be a related partytransaction for the purposes of the AIM Rules, due to the connection betweenGerhard Huber and the counterparties to the option agreements. The Company understands that the Villas Development and Hotel Development aredue for completion in 2010, subject to obtaining the relevant Croatian planningpermissions. The Company also understands that 87 of the 431 units containedwithin the Villas Development have been pre-sold. In an independent valuation of both operations by UK based surveyors KingsSturge, the Villas Development and the Hotel Development are estimated at €39mand €5m respectively, subject to a number of conditions including the grant ofthe necessary planning permissions. - ends - For further information please contact: Cubus Lux Plc Haggai Ravid +972 (544) 565 682 Corporate Synergy Oliver Cairns/Romil Patel 020 7448 4400 Threadneedle Communications Graham Herring/Josh Royston 020 7936 9605 This information is provided by RNS The company news service from the London Stock Exchange