Engel East Europe N.V.
13 July 2006
13 July 2006
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-listed
Central and Eastern European ('CEE') residential property developer (EEE:L), is
pleased to announce that it has signed a Terms of Agreement with a prestigious
European investment fund specialising in emerging markets ('Fund' or 'the Fund')
which will invest in a subsidiary of the Company that owns the Belgrade Marina
project, as announced on 23 February 2006. According to the Terms of Agreement,
the parties are scheduled to enter into the definitive agreements within the
next 30 days.
As announced on February 23, 2006, Engel Marina Dorcol, a 95% owned subsidiary
of Engel, won a bidding round run by the Municipality of Belgrade, to develop a
mixed-use project on the acquired land with a total gross building area of
76,000m2. The development will include approximately 600 residential units, as
well as a marina, offices, a shopping centre, restaurants and coffee shops on
the banks of the Danube River. The Company estimates that the total projected
sales of the development will be approximately €160 million.
According to the Terms of Agreement the Fund will invest €11.9 million for an
equity investment of 30% of the local subsidiary's shares. €10 million will be
paid upon entering into the definitive agreement and the remaining €1.9 million
will be paid within one year thereafter. The Fund's share in the Project's
proceeds will vary in accordance with the project's results.
The Company estimates that this investment transaction will result in profits
before 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 which
once more demonstrates the trust that the international institutional investment
entities have for our Company, its business model and its management. This
agreement is consistent with the Company's strategy of creating value and
minimising risk in real estate development by way of exploiting the management
team's experience in identifying potential development sites with relatively low
land costs and high profit margins.
The project in Belgrade marina, which we believe to be one of the largest and
most prestigious development projects ever undertaken in Serbia, is one of the
best opportunities in the market. We are confident that the unique location of
the venture in the city - on the banks of the Danube River - and Engel's high
standards of construction, related facilities and management will make this a
very successful project.
Citigate Dewe Rogerson
George Cazenove / Hannah Seward
020 7638 9571
Notes to editors
Engel East Europe was admitted to AIM in December 2005 and is an international
residential property developer incorporated in The Netherlands. The Company
operates in Central and Eastern Europe (the 'CEE Region') and has various
developments in Hungary, the Czech Republic, Poland and Bulgaria, as well as
operations in Germany and Canada. Engel is currently involved in the
development of more than 11,000 residential units and is in negotiations to
purchase land for the development of thousands of additional units throughout
the CEE Region.
This information is provided by RNS
The company news service from the London Stock Exchange