Lewis Charles Romania Property Fund Limited Disposal
13 Marzo 2009 - 2:58PM
UK Regulatory
TIDMLCSR
LEWIS CHARLES ROMANIA PROPERTY FUND LIMITED
AIM: LCSR
Lewis Charles Romania Property Fund sells its Ploiesti Retail Development
Project to Blackpearl Property
Lewis Charles Romania Property Fund ('LCSR' or 'the Company') announces the sale
today of S.C. Retail Park Magnolia S.R.L. ("Magnolia") which was a subsidiary
of the Company and which holds a prime retail site in Ploiesti , Romania at
which it is planned to develop the Zenith Project ("the Project").
Although the Project is at an advanced stage of planning, it has not been
possible, despite significant efforts, to secure development finance for the
construction of the scheme in the current financial markets. The Board has,
accordingly, carefully reviewed the available options. They have concluded that
the future of the project will be best progressed through the disposal of
Magnolia and in turn this will de-risk the exposure for LCSR whilst preserving
as much of the potential opportunity afforded by the Project as possible for
shareholders.
Consequently, the Board has agreed the sale as recommended by the Fund Managers,
which has been achieved by disposing of all of the shares in Magnolia to
Blackpearl Property Limited ("Blackpearl") for a nominal consideration. Under
the arrangement, LCSR has entered into a profit sharing agreement with
Blackpearl, where it is entitled to receive 50% of the future profits from the
Project. Two of the Fund Managers will join the Board of Magnolia to represent
the Company's interests. The Company retains no liabilities in connection with
Magnolia, including in respect of the EUR 3.63 million of third party debt
within Magnolia, nor does it have any further future funding obligations with
regard to the Project.
LCSR has an existing relationship with the development team of Blackpearl
Property, who have a joint venture residential development at Mogosoaia,
Bucharest. In addition, Blackpearl and its fellow investors hold a substantial
property portfolio in Romania, comprising developments in Central Bucharest,
Ploiesti, Baia Mare, Ghimpati and Targu Mures. Their sister company, Alchemy
Development Management, has an established office in Bucharest, Romania with
experienced architectural, legal, development, project management and finance
teams. Blackpearl has links with a number of financial institutions in Romania
and successfully secured funding for the initial development stage of the
Mogosoaia residential project.
Blackpearl currently intends to continue the development of a retail project in
phases, thereby de-risking the Project and rolling it out in accordance with
market demand.
Magnolia has been held on the Company's balance sheet at cost of EUR 19.792
million. This is comprised of an equity investment in Magnolia of EUR 6.0
million which will be written off and loans to Magnolia of EUR 13.792 million,
which it is expected will be provided against in full in the accounts. Any
profits due to the Fund under the profit share arrangements will be used to
repay the outstanding EUR 13.792 million loan to Magnolia. Accordingly it
anticipated that the Company's next published accounts will reflect a charge of
the full EUR 19.792 million. The board is nevertheless hopeful that the build-
out of the Project over the next few years will see a significant part of this
value being recaptured.
Westhill SRL ("Westhill") was previously appointed to manage the development on
behalf of Magnolia, and this contract has now been terminated.
END
Ed Portman, Ben Way
Conduit PR
+ 44 (0) 207 429 6607 / + 44 (0) 7733 363 501
Loraine Pinel, Mark Anderson,
Lewis Charles Securities Limited
+ 44 (0) 207 456 9100 / + 44 (0) 7876 560 787
Robert Finlay, Travis Inlow
Canaccord Adams
+44 (0) 20 7050 6500
Grafico Azioni Lewis Char. (See LSE:RPF) (LSE:LCSR)
Storico
Da Mag 2024 a Giu 2024
Grafico Azioni Lewis Char. (See LSE:RPF) (LSE:LCSR)
Storico
Da Giu 2023 a Giu 2024
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