13th Jul 2006 07:00
Engel East Europe N.V.13 July 2006 13 July 2006 PRESS RELEASE ENGEL EAST EUROPE N.V. €11.9M Equity investment by European Fund Engel East Europe N.V. ("Engel East Europe" or "the Company"), the AIM-listedCentral and Eastern European ("CEE") residential property developer (EEE:L), ispleased to announce that it has signed a Terms of Agreement with a prestigiousEuropean investment fund specialising in emerging markets ("Fund" or "the Fund")which will invest in a subsidiary of the Company that owns the Belgrade Marinaproject, as announced on 23 February 2006. According to the Terms of Agreement,the parties are scheduled to enter into the definitive agreements within thenext 30 days. As announced on February 23, 2006, Engel Marina Dorcol, a 95% owned subsidiaryof Engel, won a bidding round run by the Municipality of Belgrade, to develop amixed-use project on the acquired land with a total gross building area of76,000m2. The development will include approximately 600 residential units, aswell as a marina, offices, a shopping centre, restaurants and coffee shops onthe banks of the Danube River. The Company estimates that the total projectedsales of the development will be approximately €160 million. According to the Terms of Agreement the Fund will invest €11.9 million for anequity investment of 30% of the local subsidiary's shares. €10 million will bepaid upon entering into the definitive agreement and the remaining €1.9 millionwill be paid within one year thereafter. The Fund's share in the Project'sproceeds will vary in accordance with the project's results. The Company estimates that this investment transaction will result in profitsbefore tax of approximately €9.0 million. Commenting on the transaction, Jacob Engel, Executive Chairman, said "We are delighted to be announcing this agreement with a prestigious fund whichonce more demonstrates the trust that the international institutional investmententities have for our Company, its business model and its management. Thisagreement is consistent with the Company's strategy of creating value andminimising risk in real estate development by way of exploiting the managementteam's experience in identifying potential development sites with relatively lowland costs and high profit margins. The project in Belgrade marina, which we believe to be one of the largest andmost prestigious development projects ever undertaken in Serbia, is one of thebest opportunities in the market. We are confident that the unique location ofthe venture in the city - on the banks of the Danube River - and Engel's highstandards of construction, related facilities and management will make this avery successful project. EnquiriesCitigate Dewe RogersonGeorge Cazenove / Hannah Seward020 7638 9571 Notes to editors Engel East Europe was admitted to AIM in December 2005 and is an internationalresidential property developer incorporated in The Netherlands. The Companyoperates in Central and Eastern Europe (the "CEE Region") and has variousdevelopments in Hungary, the Czech Republic, Poland and Bulgaria, as well asoperations in Germany and Canada. Engel is currently involved in thedevelopment of more than 11,000 residential units and is in negotiations topurchase land for the development of thousands of additional units throughoutthe CEE Region. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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