14 Mar 2011 07:00
Dragon-Ukrainian Properties & Development plc
(the "Company" or "DUPD")
14 March 2011
Investment in Arricano
On 13 September 2010 the Company announced the acquisition of a 35% shareholding in Arricano Trading Ltd ("Arricano"), a leading developer of upscale shopping centres in Ukraine. Arricano holds a 100% interest in 4 shopping centres and a shareholding of 50% minus 1 share in Sky Mall. In relation to Sky Mall, Arricano entered into a call option agreement with its local partner in this project, whereby it could acquire the remaining shareholding of 50% plus 1 share at a pre-agreed valuation of $51-56 million, depending on the timing (the "Sky Mall Call Option").
Expert Capital (the 65% shareholder in Arricano) and DUPD had agreed to consider a capital increase into Arricano of $60 million to finance the Sky Mall Call Option, to complete the development of the 2nd stage of InterMall and repay certain indebtedness.
DUPD wishes to provide an update on its investment in Arricano.
Arricano has successfully raised $60 million of equity capital which will allow it to finance the execution of the Sky Mall Call Option and certain working capital needs. The $60 million equity capital was paid in by Retail Real Estate (formerly Expert Capital SA), the founder and majority shareholder of Arricano. Having obtained sufficient funds, Arricano initiated the execution of the Sky Mall Call Option, which is currently delayed due to certain ongoing legal proceedings. Arricano expects to be able to execute the Sky Mall Call Option in the course of the next 2-3 months. Following the share capital increase, the stake of DUPD has therefore decreased to 16.7% reflecting the post-money valuation of Arricano of $180 million.
Arricano is also currently in discussions with a bulge bracket investment bank regarding a $30 million financing in the form of a convertible loan. Arricano aims at closing on that transaction by end of April 2011.
For further information, please contact:
Dragon-Ukrainian Properties & Development plc (www.dragon-upd.com)
Tomas Fiala
+380 44 490 7120
Dragon Capital Partners Limited (Investment Manager)
Chris Kamtsios
+380 44 490 2021
Panmure Gordon (UK) Limited (Nominated Adviser and Broker)
Richard Gray / Andrew Potts
+44 (0)20 7459 3600