TIDMSPDI
RNS Number : 7132B
Secure Property Dev & Inv PLC
14 June 2021
Secure Property Development & Invest PLC/ Index: AIM / Epic:
SPDI / Sector: Real Estate
14 June 2021
Secure Property Development & Investment PLC ('SPDI' or 'the
Company')
Update on Arcona Property Fund N.V. Agreement
Highlights
-- Agreements signed for Stage Two of the Arcona transaction
which involves transfer of certain SPDI assets in Romania and
Ukraine in exchange for Arcona shares and warrants and EUR1m cash
(the 'Arcona Transaction')
-- Estimated EUR8.2 million value of Stage Two alone is almost
at par with SPDI's overall current market capitalisation,
highlighting significant divergence between real asset value within
the Company and market value of the Company
-- Arcona Transaction, which has an estimated intrinsic value of
EUR30 million, is in line with strategy to create a larger Central
and South Eastern European focused investment vehicle
Secure Property Development and Investment PLC (AIM: SPDI), the
AIM-quoted South Eastern European focused property company, is
pleased to announce the signing of three agreements ('the
Agreements') relating to the proposed transfer of certain assets
owned by SPDI in Romania and Ukraine (together 'the Stage Two
Assets') to Arcona Property Fund N.V. ('Arcona'). Under the terms
of the Agreements, SPDI will receive approximately 605,000 new
ordinary shares in Arcona (the 'Stage Two Shares') and
approximately 145,000 warrants over ordinary shares in Arcona (the
'Stage Two Warrants') (the 'Stage Two Transaction') as well as
EUR1m in cash, subject to, inter alia, standard form adjustment and
finalisation in accordance with the Agreements.
Creating a larger Central and South Eastern European focused
investment vehicle
The transfer of the Stage Two Assets represents the second stage
of an intended three-stage process for the Arcona Transaction to
complete the previously announced transfer to Arcona of SPDI's
property portfolio, excluding its Greek logistics properties, to
create a leading Central and South Eastern European focused
property investment vehicle. In exchange for the transfer of the
Company's assets, and subject to the same standard form adjustment
and finalisation mentioned above, SPDI is to be issued new ordinary
shares in Arcona and warrants over Arcona ordinary shares. Arcona
invests in Central European commercial property and is listed on
Euronext Amsterdam and the Prague Stock Exchange. As at close of
markets on 10 June 2021, Arcona's share price was EUR6.08.
EUR8.2 million value of the Stage Two Transaction
The total EUR8.2 million value of the Stage Two Transaction
(based on a net asset value of EUR11.87 per Arcona share as at 31
December 2020) is almost at par with SPDI's current overall market
capitalisation which, in addition to the Stage Two Assets, reflects
Arcona shares held already by SPDI following the completion of
Stage One of the Arcona Transaction, as well as the Assets to be
included in Stage Three of the Arcona Transaction (the 'Stage Three
Transaction').
Stage Two Transaction
The Stage Two Assets which, as per the Company's unaudited 31
December 2020 financials, recorded an aggregate Gross Asset Value
of EUR15.1 million, comprise the following:
-- EOS, a purpose built one-tenant office building in Bucharest Romania leased to Danone Romania
-- 24,345% of the Delenco office building also in Bucharest,
fully let to a number of tenants with the anchor tenant being
ANCOM, the telecoms regulator in Romania
-- Two plots of land for development in Kiev
Closing of the Stage Two Transaction is expected to take place
in H2 2021, at which point SPDI will be issued the Stage Two Shares
and the Stage Two Warrants. As previously disclosed, SPDI intends,
in time, to distribute the Arcona shares and warrants to its
Shareholders.
In August 2019, SPDI and Arcona signed a conditional Framework
Agreement which sets out the process by which both parties will
proceed to execute the Stage Two Transaction and Stage Three
Transaction. It should be noted that completion of the Stage Two
Transaction is not conditional on reaching agreement on the Stage
Three Transaction, discussions on which are still ongoing. It is
likely that closing of the Stage Two Transaction will be
conditional on SPDI Shareholder approval pursuant to AIM Rule 15,
and further updates will be provided in this regard as and when
appropriate.
Michael Beys, Chairman, said ; "With an estimated intrinsic
value of EUR30million, the Arcona transaction has been worth
pursuing, as per our shareholders' guidance, despite the challenges
posed, both at corporate and personal levels, by the global
pandemic and associated lockdowns. It is therefore a testament to
the perseverance of the board and the management team that the
transaction has been advanced to the point of signing the
agreements for Stage Two. With an estimated value of EUR8.2
million, Stage Two on its own highlights the substantial divergence
that has opened up between how the market and the industry value
SPDI's portfolio of South Eastern European real estate. The
expected completion of Stage Two later this year therefore ought to
act as a value trigger event for shareholders, not just because it
crystallises the value of the assets concerned, but also because
SPDI will be issued with shares in a much larger and more
diversified Central and South Eastern European focused property
company."
Shareholder call
The Company intends to hold a shareholders' call within the next
few weeks, during which management will provide a review of the
Arcona Transaction and answer any questions raised by its
shareholders. Further details regarding the shareholder call will
be provided in due course.
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
* * ENDS * *
Lambros Anagnostopoulos SPDI Tel: +357 22 030783
Rory Murphy Strand Hanson Limited Tel: +44 (0) 20 7409 3494
Ritchie Balmer
Rob Patrick
Jon Belliss Novum Securities Limited Tel: +44 (0) 207 399 9400
Frank Buhagiar St Brides Partners Ltd Tel: +44 (0) 20 7236 1177
Cosima Akerman
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