RNS Number : 7565Y
European Convergence Property CoPLC
09 September 2009
09 September 2009
EUROPEAN CONVERGENCE PROPERTY COMPANY PLC (THE 'COMPANY' OR 'ECPC')
Property Revaluation and NAV
The Board of ECPC announces the results of an independent revaluation of the Company's remaining investment property, Mall Veliko Turnovo ('MVT') in Bulgaria.
The valuation was carried out by SHM Smith Hodgkinson ('SHM') as at 30 June 2009.
SHM is a British firm of Chartered Surveyors established in 1860 and specialising in property and corporate asset consulting and valuation services. In 2004, SHM was acquired by the Gordon Brothers Group of USA. GB Group has approximately 300 employees worldwide including SHM offices in London, Manchester, Leeds, Bucharest, Belgrade and Kyiv. The firm's Bucharest office leads its services across the SEE region and in 2008 completed valuations for assets totalling approximately €4 billion.
Taking into account the continued uncertainty in global economic and credit market conditions, and the increasingly visible impact of these in Bulgaria, SHM have increased their expected exit yield, and increased the discount rate applicable to future cashflows compared to their view taken at December 2008.
SHM have valued the property at €23.6m, therefore showing a decrease in the market value of MVT of €4.3m from the value of €27.9m as at 31 December 2008. The decrease reflects the continuing impact on the retail property investment market in Bulgaria resulting from the current global credit restrictions and economic conditions.
The valuation of the asset is analysed below.
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€m
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Equity Investment
|
External Borrowings
|
Total Acquisition Cost*
|
Valuation
as at 31/12/08**
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Revaluation
as at
30/06/09
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Decrease from previous valuation
|
%
|
|
Mall Veliko Turnovo
|
10.6
|
19.2
|
29.8
|
27.9
|
23.6
|
(4.3)
|
(15.4)
|
* including transaction costs
** by Jones Lang Lasalle
The result of this revaluation on the net assets per share of the Company, excluding other factors, will be a reduction of 0.07 Euro from the published NAV as at 31 Dec 2008, which would result in a NAV per share of €0.14. It should be noted that this calculation is for illustrative purposes only and may differ from the actual current NAV.
The Company's full year results to 30 June 2009 are currently under audit, and will reflect this valuation and will include an updated audited NAV per share. These are expected to be announced by late September.
The valuation of the Company's remaining property asset is based on a number of estimates and assumptions concerning future events which may or may not prove correct.
In Bulgaria, as worldwide, the outlook for the economic environment and local credit markets remains uncertain. Given the importance of debt to the valuation of property assets, changes in the debt market over the coming months may have material effects on the Company's valuation.
For further information please contact:
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Charlemagne Capital
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+44 (0)207 518 2100
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Varda Lotan / Christopher Fitzwilliam Lay
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Galileo Fund Services Limited
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+44 (0)1624 692600
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Ian Dungate, Company Secretary
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Panmure Gordon (UK) Limited
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+44 (0)20 7459 3600
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Hugh Morgan
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Stuart Gledhill
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Smithfield Consultants
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+44 (0)20 7360 4900
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John Kiely
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Gemma Froggatt
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www.europeanconvergence.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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