Metir Plc Regulatory News (MET)

11 Jul 2007 09:06

Metro Baltic Horizons PLC11 July 2007 This replaces the announcement that appeared at 7am today.Non-material text amendments have been made in the second paragraph. 11 July 2007 Metro Baltic Horizons Plc NEW RIGA DEVELOPMENT PROJECT IPO PROCEEDS FULLY COMMITTED Metro Baltic Horizons plc ('Metro Baltic' or the 'Company'), the propertyinvestment company focused on prime office and residential developmentopportunities in the Baltic State capitals and St Petersburg, Russia, is pleasedto announce that it has entered into a Memorandum of Understanding('MOU') toacquire a 14 hectare site in Riga. All contractual matters relating to theacquisition are expected to be concluded within the next 60 days. On completionthis acquisition will represent the fourth transaction undertaken by the Companysince its Admission to AIM on 11 December 2006. The site is prominently located on the banks of the Daugava River within 3kmfrom Riga's Old Town. The site is currently zoned for mixed use but the Companybelieves that given the quality of the site's location that it would also besuited to residential development. Under the terms of the MOU, the Company will make an initial payment of €10m,which together with initial working capital will utilise circa 30% of the netfunds raised by the Company in its IPO. Following this initial payment, theCompany will be effectively fully invested having committed more than 95% of itsnet investable IPO proceeds. It is proposed that rezoning, architectural planning and engineering of the sitewill commence immediately and are expected to be completed within two years. Itis anticipated that the site would be developed for residential or mixed use ona phased basis. Initial estimates indicate that the site could potentiallyaccommodate up to 100,000m2 of gross saleable area (excluding parking) and havea gross development cost (acquisition, construction and finance) ofapproximately €200m. Although it is too early to forecast possible returns, theCompany is confident that under all reasonable planning and zoning scenariosthat the anticipated investment will exceed the Company's targeted minimuminternal rate of return of 25%.Further details of this acquisition will be madeavailable in the coming weeks. Commenting on the acquisition, Robin James, Chairman, said: "Riga continues to offer significant value for well-positioned buyers withmeaningful local development capabilities and we are pleased to have expandedour portfolio with this quality acquisition. We are delighted to haveeffectively committed nearly all of the IPO proceeds in just over six months andwill continue to look for similar opportunities in our target cities." James Kenny, Chief Executive of Metro Frontier, added: "This site in Riga is unique in its size and prominent location and offers anexciting opportunity to build a landmark development in a fast growing anddynamic city and creating significant value for the Company's shareholders.'' Metro Baltic has appointed Metro Frontier Limited as Investment Manager andMetro Capital Management AS as Investment Adviser. The Company also announces that it will shortly launch its website(www.metrobaltichorizons.com) which will contain all information required to bedisclosed under London Stock Exchange rules. For further information, please contact: Metro Frontier James Kenny Tel: +353 86 3977 850 Oriel Securities Tom Durie Tel: +44 (0)20 7710 7623 Financial Dynamics Stephanie Highett/Dido Laurimore Tel: +44 (0) 20 7831 3113 Notes to Editors Metro Baltic Horizons (ticker code: MET.L) is a property investment companytargeting the capital cities of the three Baltic States - Latvia, Estonia andLithuania - and St Petersburg, Russia. The Baltic States are amongst the fastest growing economies in Europe and StPetersburg is regarded as one of the top investment locations in Russia.Combined, this represents a strategically located region with developed andimproving business, trading and political links. The Investment Manager will source and recommend suitable property developmentopportunities to the Company principally in the office and residential sectorsand expects to target development projects which can demonstrate an ability togenerate a minimum internal rate of return to the Company of 25%. The Investment Adviser is an experienced and fast growing property asset managerand developer with offices in Riga, Tallinn and St Petersburg. It has a team of27 experienced professionals managing a portfolio of 21 projects across theregion. Riga is the capital of Latvia and has a population of circa 800,000.Latvia wasthe fastest growing economy in EU in 2006 recording a GDP growth rate of 11.9%compared to an EU (27) average of 2.9%. Growth rates are forecast to stay athigh levels with an average annual GDP growth rate of 7.7% forecast through2010. Riga's property market has been one of the best performing in Europe inrecent years and in 2006 saw demand exceeding supply in most classes of realestate. This information is provided by RNS The company news service from the London Stock Exchange