DUPD.L Regulatory News (DUPD)

27 Jul 2007 09:56

Dragon-Ukrainian Prop. & Dev. PLC27 July 2007 27 July 2007 Dragon - Ukrainian Properties & Development Plc (the "Company" or "DUPD") Investment in Henryland Limited Dragon - Ukrainian Properties & Development Plc, one of the largest AIM listedreal estate investment companies focused on investments in Ukraine and managedby Dragon Capital Partners Limited ("DCP"), is delighted to announce that it hastoday entered into a Subscription Agreement with Henryland Group Limited, aBritish Virgin Islands company ("Henryland"), and a shareholders agreement withDragon Capital Holding Limited (an associated company of DCP) ("DCH"), ConcentraLimited and Sakaropel Limited, to acquire a 38% interest in Henryland, a companyseeking to develop 6 modern retail centers in various regions of Ukraine, for US$12 million. In addition as part of these arrangements the Company has agreedto enter into an option in favour of DCH (the "Call Option") pursuant to whichDCH may become entitled to acquire up to 900.000 shares in Henryland from DUPDfor a consideration of US$ 0.01 per share. Further details of the Call Optionare set out below. This project is in line with the investment strategy of DUPD, having its corefocus on development and re-development opportunities in commercial andresidential real estate in Kiev and other main regional centers of Ukraine. Highlights: • The Company has agreed to acquire 12,000,000 shares in Henryland Group Limited, a property development company for the cash consideration of US$12 million. This will give DUPD an initial holding of 38% in Henryland. • The project entails attainment of land lease rights on a 4 hectares land plot in Kremenchug with subsequent construction of a 15,000 sq. m retail commercial facility, acquistion of 4.27 hectares land plot in Odessa with subsequent construction of 17,000 sq. m retail commercial facility, acquisition of a 12,312 sq. m real estate asset in Lutsk and acquisition of 3 additional land plots in other regional centers of Ukraine for further development of retail shopping centers. • The Directors believe that following completion of each facility, a DIY retailer in Ukraine, which is an affiliate of DCP, will lease substantial parts of the premises under long-term leases. • The Directors believe that the first facility in Lutsk will be completed by Henryland in September, 2007. • The Directors believe that following completion of all 6 facilities (which is expected to occur during late 2009), investors in Henryland will be able to exit from the investment through a trade sale of the real estate holding company to a 3rd party property investor. Aloysius Van der Heijden, Chairman of DUPD said: "We are pleased that this isDUPD's first investment since being admitted to AIM at the beginning of June.Henryland is a company which falls directly within our investment strategy andgives DUPD a significant foothold in the Ukrainian retail sector. We are alsobusy looking at a number of other projects". Christos Kamtsios, Managing Director of DCP said: "the investment in Henrylandmarks the first investment of DUPD into the Ukrainian retail sector, a sectorwhich has witnessed remarkable growth in retail turnover over the last 2 years,which has allowed Ukraine to remain in the Top-5 of A.T. Kearney's Global retaildevelopment index in 2005, 2006 and 2007". Related Party Transaction As DCH is currently a shareholder of both Henryland and DUPD and Tomas Fiala isa director of Henryland, DCH, DCP and DUPD, under the AIM rules Henryland is arelated party to the Company. The Directors of DUPD (other than Tomas Fiala), having consulted with ZimmermanAdams International, the Company's Nominated Adviser, are satisified that thistransaction is fair and reasonable insofar as the Company's shareholders areconcerned. Following completion of the transaction DUPD is expected to own 38% ofHenryland, while DCH will own 11.3%. The remaining 50.7% of Henryland will beowned by third party investors. Call Option The Call Option will be exerciseable on the sale of DUPD's entire shareholdingsin Henryland. The number of shares over which the Call Option may be exercisedby DCH varies where the IRR achieved on such sale (as calculated in accordancewith the terms of the call option) exceeds 10 % and range from a mimimum of90,000 shares where the IRR is 11% up to a maximum of 900,000 shares where theIRR equals or exceeds 20%. The overall impact of this may be to reduce the theholding of DUPD in Henryland on exit. To reflect DCH's role in sponsoring, structuring and facilitating thetransaction with Henryland, the other investors in Henryland have also enteredinto a call option in favour of DCH on similar terms. --- ends --- For further information, please contact: Dragon Ukrainian Properties & Development PlcTomas Fiala+380 44 490 7120 Dragon Capital Partners LimitedChris Kamtsios+380 44 490 7120 Zimmerman Adams InternationalRay Zimmerman/Graeme Thom/Jonathan Evans+44 20 7060 1760 Notes to Editors About Dragon- Ukrainian Properties & Development Plc DUPD is an Isle of Man incorporated company formed to invest in the developmentof new commercial properties and re-development of existing properties inUkraine which offer the proposect of attractive returns to its shareholders.Having raised US$ 208 million at US$2 per share, DUPD's ordinary shares wereadmitted to trading on the AIM market of the London Stock Exchange on 1 June2007. About Dragon Capital Partners DCP is the private equity arm of Dragon Capital, a leading Ukrainian financialinstitution specialising in the provision of investment banking, securitiestrading, asset management and private equity services. Dragon Capital hasreceived the "Best Equities House in Ukraine" award in 2002, 2004, 2005, 2006and 2007 by "Euromoney", a leading financial journal. DCP professionals combine extensive local knowledge and expertise gained throughsubstantial investment activity in the Ukrainian private equity market accross awide spectrum of industries, including real estate. This information is provided by RNS The company news service from the London Stock Exchange