21st Aug 2006 07:01
Black Sea Property Fund Limited21 August 2006 For immediate release 21 August 2006 The Black Sea Property Fund Additional land investment at Byala The Black Sea Property Fund Limited (the "Fund"), which specialises in thefinancing and sale "off-plan" of holiday apartments in Bulgaria, is pleased toannounce an additional land investment in Byala, 50 kms south of Varna on theBlack Sea Coast, as an extension to the investment announced on 21 March 2006.€1,110,360 has been invested in 18,506 square metres of land at Byala (the"Site") (equivalent to €60 per square metre). This represents a 25% discount tothe valuation of the land prepared by Colliers International at €80 per squaremetre on a market comparison basis. It was the Board's intention at the time of the original investment in March2006 to make such an additional investment as soon as suitable land becameavailable. The owner of the land, The Bulgarian Property Investment Trust ("BPIT"), plansto develop the Site, together with other adjoining land owned by BPIT, into amajor luxury holiday complex. The terms of this investment are similar to those announced on 21 March 2006.The investment is structured in the form of a loan in order to simplify thedevelopment process and the loan has been secured by a first charge over theSite. In addition, the Fund has the right to demand repayment of the loan shouldthe project not move forward by March 2008. The Fund and BPIT will, when construction starts, convert the loan intofinancing equal to 30% of the value of the units to be built at a fixed cost of€650 per square metre. On the sale of the units, the Fund will, in addition tothe repayment of such financing, receive the first tranche of the net saleproceeds equal to 25% of the Fund's financing price (€162.5 per square metre)and share the balance in the ratio 70% to BPIT/30% the Fund. Based on the Manager's cost and valuation estimates and assumptions, a potentialgross return of approximately 91% is anticipated in respect of the Fund's totalinvestment in land at Byala of €9,709,200 (consisting of €1,110,360 investedtoday and €8,598,840 invested in March 2006). This assumes that a development ofapproximately 220,000 square metres (representing 2,700 units) is commenced onsite in June 2008 and that an average sales price of €1,230 per square metre(including VAT) is achieved. These estimates are not a profit forecast. The Fund is managed by Development Capital Management (Jersey) Limited (the"Manager"). For further information please contact:- Development Capital ManagementRoger HornettTom Pridmore020 7355 7600 Buchanan CommunicationsCharles RylandIsabel Podda020 7466 5000 Numis SecuritiesCharles Farquhar020 7776 1500 Note: As referred to in the initial prospectus for the Fund dated 21 February2005, the Manager acts as investment adviser to Rainbow Investments (Jersey)Limited, the Jersey-incorporated holding company of BPIT and receives a flatrate annual fee in this capacity. Certain employees of the Manager's group aremembers of the managing or supervisory boards of BPIT. Investment negotiationsand the decision of the Fund to invest were undertaken on an arms length basisand neither the Manager nor its employees received any additional performancebased remuneration from Rainbow or BPIT in respect of this transaction. RogerMaddock, as non-executive chairman of the Manager, abstained from the vote ofthe Board of the Fund to approve the investment. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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