TIDMECT
EUROCASTLE INVESTMENT LIMITED
Contact:
Oak Fund Services (Guernsey) Limited
Company Administrator
Attn: Hannah Crocker
Tel: +44 1481 723450
Eurocastle Releases Third Quarter 2022 Interim Management
Statement
Guernsey, 21 December 2022 -- Eurocastle Investment Limited
(Euronext Amsterdam: ECT) today
https://www.globenewswire.com/Tracker?data=y4Aq3Im1k3DnV14Uzwirx2BbQOCzZKWPkcyVtQ2R3oIbhlHfAN9pWDXULgh5enIa
has released its interim management statement for the quarter ended
30 September 2022 and provides an update on the relaunch of its
investment activity which was announced in July 2022 (the
"Relaunch").
Q3 2022 BUSINESS HIGHLIGHTS
-- Q3 ADJUSTED NET ASSET VALUE ("NAV")1 of EUR10.2 million, or EUR10.26 per
share2 vs. EUR10.16 per share at 30 June 2022. Pro Forma for the Tender
Offer that closed in August, the 30 June 2022 NAV was EUR10.07 per share.
-- Q3 NAV reflects the following movements:
-- EUR0.24 per share, or 13%, increase in the valuation of the
remaining two real estate fund investments primarily
following sales.
-- EUR0.04 per share, or 3%, decrease in the valuation of the
remaining NPL interest reflecting its subsequent sale in
Q4.
Q2 2022 PF Q3 Cash Q3 FV
Q2 2022 NAV(3) Movement Movement Q3 2022 NAV
-------------- --------------- ------------- ------------- --------------
EUR EUR EUR EUR EUR
EUR'm p.s. EUR'm p.s. EUR'm p.s. EUR'm p.s. EUR'm p.s.
Real Estate Funds 1.8 0.96 1.8 1.79 (1.3) (1.27) 0.2 0.24 0.8 0.76
Italian NPLs &
Other Loans 1.3 0.72 1.3 1.36 (0.3) (0.31) (0.0) (0.04) 1.0 1.01
Net Corporate
Cash(4) 23.9 12.85 15.0 15.11 1.6 1.57 (0.4) (0.42) 16.2 16.27
Legacy German Tax
Asset 4.6 2.50 4.6 4.68 - - - - 4.6 4.67
----------------- ------ ------ ------ ------- ----- ------ ----- ------ ----- -------
IFRS NAV 31.6 17.04 22.8 22.94 - - (0.2) (0.22) 22.6 22.72
================= ====== ====== ====== ======= ===== ====== ===== ====== ===== =======
Additional
Reserves(5) (12.8) (6.88) (12.8) (12.87) - - 0.4 0.40 12.4 (12.46)
Adjusted NAV 18.9 10.16 10.0 10.07 - - 0.2 0.19 10.2 10.26
================= ====== ====== ====== ======= ===== ====== ===== ====== ===== =======
Ordinary shares
outstanding 1,857,535 992,555 995,555
-- BUSINESS UPDATE
-- On 8 July 2022, the Company announced the conclusion of its
strategic review and the decision to relaunch its investment
activity (the "Relaunch"). It also announced a tender offer to
provide a liquidity opportunity for those shareholders who did not
wish to participate in the Relaunch (the "Tender Offer").
-- In August 2022, the Tender Offer closed with 47% of Ordinary
Shares in issue as at 4 August 2022 tendered, resulting in
Eurocastle accepting 864,980 shares in exchange for EUR10.26 per
share, or EUR8.9 million in total.
-- During the third quarter, the Company received EUR1.6 million, or
over 50% of its Q2'22 NAV relating to its investments, comprising
(i) a EUR1.3 million distribution from Real Estate Fund Investment
V (90% of its Q2'22 NAV), and (ii) EUR0.3 million from the sale
of one of the two remaining NPL pools.
-- SUBSEQUENT EVENTS TO 30 SEPTEMBER 2022
-- On 6 December 2022, the Company completed the sale of its second
and last remaining NPL pool resulting in EUR1.0 million of
proceeds, in line with its Q3 2022 NAV.
-- Following this realisation, the Company's assets mainly comprise:
-- Two Real Estate Fund investments with a Q3 NAV of EUR0.8 million, or
EUR0.76 per share, where all underlying apartments are now sold or
currently under contract to be sold.
-- EUR17.2 million of net corporate cash6
RELAUNCH UPDATE
Eurocastle will commence its new investment strategy by
initially focusing on opportunistic real estate in Greece with a
plan to expand across Southern Europe, where the Manager has an
extensive footprint and a long-term track record investing in this
asset class. The Company will invest primarily in real estate
auctions leveraging the Manager's deep knowledge of the sector,
which offers significant investment opportunities in the current
market cycle. The Board believes that this strategy will allow
Eurocastle to deploy available cash in order to establish a
platform and create a meaningful track record, while generating
attractive risk adjusted returns in the short term.
At the same time, the Board will continue to monitor the market
environment for raising new capital in order to assess pursuing all
elements of its new investment strategy, which would require
additional capital to achieve meaningful scale.
The Board considers that any potential additional costs
resulting from this phased approach are adequately covered by the
Company's existing Additional Reserves. The Board will continue to
evaluate these reserves and the Company's available capital, taking
into account investment opportunities and the performance of the
new strategy.
Shareholders should however be aware that the implementation and
performance of the Company's new investment strategy is subject to
risks, uncertainty, and assumptions. The Manager is currently in
the early stages of pursuing a new investment strategy and there
can be no certainty that it will have success in doing so. There is
likewise no certainty that it will be able to attain sufficient
scale to achieve the desired returns. In addition, changes in
economic conditions generally and the real estate market
specifically, the availability of appropriate investment
opportunities and the ability to raise financing on suitable terms
may also affect the success of the Relaunch. Accordingly, there is
no guarantee that the Company's new investment strategy will be
effectively implemented nor will there necessarily be a future
opportunity for shareholders to achieve an exit from their
investment in the Company at a price equal to or higher than the
current share price.
For further details of the Relaunch, the Company's new
investment strategy and the Additional Reserves, please refer to
the Circular published in July 2022 and available on the Company's
website under the Periodic Reports and Shareholder Communications
section.
NOTICE: This announcement contains inside information for the
purposes of the Market Abuse Regulation 596/2014.
ADDITIONAL INFORMATION
For investment portfolio information, please refer to the
Company's most recent Financial Report, which is available on the
Company's website (www.eurocastleinv.com).
Terms not otherwise defined in this announcement shall have the
meaning given to them in the Circular.
ABOUT EUROCASTLE
Eurocastle Investment Limited ("Eurocastle" or the "Company") is
a publicly traded closed-ended investment company. On 18 November
2019, the Company announced a plan to realise the majority of its
assets with the aim of accelerating the return of value to
shareholders. On 8 July 2022, the Company announced the relaunch of
its investment activity and is currently in the early stages of
pursuing its new strategy by initially focusing on opportunistic
real estate in Greece with a plan to expand across Southern Europe.
For more information regarding Eurocastle Investment Limited and to
be added to our email distribution list, please visit
www.eurocastleinv.com.
FORWARD LOOKING STATEMENTS
This release contains statements that constitute forward-looking
statements. Such forward-looking statements may relate to, among
other things, future commitments to sell real estate and
achievement of disposal targets, availability of investment and
divestment opportunities, timing or certainty of completion of
acquisitions and disposals, the operating performance of our
investments and financing needs. Forward-looking statements are
generally identifiable by use of forward-looking terminology such
as "may", "will", "should", "potential", "intend", "expect",
"endeavour", "seek", "anticipate", "estimate", "overestimate",
"underestimate", "believe", "could", "project", "predict",
"project", "continue", "plan", "forecast" or other similar words or
expressions. Forward-looking statements are based on certain
assumptions, discuss future expectations, describe future plans and
strategies, contain projections of results of operations or of
financial condition or state other forward-looking information. The
Company's ability to predict results or the actual effect of future
plans or strategies is limited. Although the Company believes that
the expectations reflected in such forward-looking statements are
based on reasonable assumptions, its actual results and performance
may differ materially from those set forth in the forward-looking
statements. These forward-looking statements are subject to risks,
uncertainties and other factors that may cause the Company's actual
results in future periods to differ materially from forecasted
results or stated expectations including the risks regarding
Eurocastle's ability to declare dividends or achieve its targets
regarding asset disposals or asset performance.
(1) In light of the Realisation Plan announced in November 2019,
the Adjusted NAV as at 30 September 2022 reflects existing
additional reserves for future costs and potential liabilities,
which have not been accounted for under the IFRS NAV. No
commitments for these future costs and potential liabilities
existed as at 30 September 2022. IFRS NAV as at 30 September 2022
was EUR22.6 million or, EUR22.72 per share.
(2) Per share calculations for Eurocastle throughout this
document are based on 995,555 shares, unless otherwise stated.
(3) The Company's IFRS and Adjusted NAV as at 30 June 2022 pro
forma for the Tender Offer.
(4) Reflects corporate cash net of accrued liabilities and other
assets.
(5) Reserves that were put in place when the Company realised
the majority of its investment assets in December 2019 in order for
the Company to continue in operation and fund its future costs and
potential liabilities. These reserves are not accounted for under
IFRS.
(6) The Company's reported Q3 Net Corporate Cash pro forma for
the EUR1.0 million of proceeds received in December from the sale
of its last NPL portfolio.
(END) Dow Jones Newswires
December 21, 2022 02:00 ET (07:00 GMT)
Copyright (c) 2022 Dow Jones & Company, Inc.
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