Trading Update
28 Gennaio 2009 - 8:00AM
UK Regulatory
TIDMLCSR
27 January 2009
Lewis Charles Romania Property Fund Limited
AIM: LCSR
Trading Update
The Directors of the Lewis Charles Romania Property Fund (`the Company') are
pleased to issue the following trading update in order to keep shareholders and
the market in general abreast of events concerning the Company's investments.
We have 2 projects in Romania: a residential development in Mogosoaia (a NW
suburb of Bucharest), and a shopping centre project at Ploiesti (about 40 km
north of Bucharest). Our plans for both projects assume a contraction of the
Romanian economy and continued economic weakness until 2011. Both projects have
debt at the Romanian subsidiary company / joint venture level but this debt is
without recourse to the Guernsey Company. The Company had EUR 1.7 million in
cash at the Guernsey level on 31 December 2008.
Mogosoaia. This is a 50:50 joint venture between the Company, the developer, Ali
Chemais and his partners; the joint venture company is Gold Developments SPV
srl, a company registered in Romania. The Company has invested EUR 13.4 million
into the joint venture. The joint venture residential project has now been given
the brand name `Evergreen'; the website (www.evergreenresidences.ro) will go
live at the end of February, when the sales and marketing campaign will begin.
It is currently intended that the Evergreen project will be built over the next
four years in seven phases with a total build area of 125,000 sq m. The site has
now been cleared and Phase 1 will launch in March 2009, consisting of 278
apartments and a total build area of 31,500 sq m. An important part of planning
for de-risking the project is that Phase 1 will be broken down into 3 sub
phases, each of which could be stand-alone: Phase 1A consists of 64 apartments
(7,000 sq m); Phase 1B of 60 apartments (7,500 sq m) and Phase 1C of 154
apartments (17,250 sq m). Construction of Phase 1B will not begin until most of
Phase 1A has been sold. Although the scheme has not been officially launched
early soft marketing has been positive. Affordability is seen as a key attribute
in the current climate; the sales price average target for Phase 1A is EUR 1,200
per sq m which the Company believes is a competitive price in the Bucharest
market. The construction price target for this phase is EUR 600 per sq m. The
bank financing for the project has been provided by Unicredit and a facility of
EUR 10 million has been secured. The first drawdown from this facility has
already taken place. Given the planned phasing of construction and sales, it is
expected that this facility will be sufficient to cover all construction costs
and professional fees for the whole of Phase 1.
Ploiesti. The Company has invested EUR 21.6 million in this project, of which it
is the sole owner through its Romanian subsidiary company SC Retail Park
Magnolia sarl (`Magnolia'). The project has been given the brand name Zenith
(www.zenithromania.com). Magnolia owns a 99,394 sq m site which has a `PUZ'
(Urban Zoning Plan) specific to the site. This approved PUZ allows the following
maximum development parameters: an occupation percentage of 70%; a utilization
coefficient of 2; and a height regime of ground floor + 4 (20 meters at the
cornice of the main unit). The project at Ploiesti has reached an advanced stage
of planning but construction of this project will not begin until the economic
climate improves and finance is available; until finance is available the
project remains on hold. Magnolia has short-term debt which is repayable on 20
July 2009 of EUR 4 million, and also owes EUR 2.7 million to a group of
creditors that have been responsible for the planning and design of Zenith. The
Board is currently negotiating a standstill agreement with these creditors so
that the Company can hold the project in suspension until the economic climate
improves, and will seek to re-finance Magnolia's short term debt. A further
announcement will be made in due course.
For further information please contact
Ed Portman, Ben Way , Conduit PR
+44 (0) 207 429 6607/+44 (0) 7733 363 501
Loraine Pinel, Mark Anderson, Lewis Charles Romania Property Fund
+44 (0) 20 7456 9100/+44 (0) 7876 560 787
Robert Finlay, Canaccord Adams
+44 (0) 20 7050 6500
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