Secure Property making good progress with sale of non-Greek assets
South Eastern Europe-focussed property company Secure Property Development updated the market on the sale of its non-Greek assets to Arcona Property Fund on Friday.
The AIM-traded firm had announced on 18 December that it had entered into a conditional implementation agreement for the sale of its property portfolio, excluding its Greek logistics properties, to Amsterdam-listed commercial property investor Arcona.
It said the all-share transaction valued its non-Greek portfolio at €29.25m, based on a net asset value of €13.98 per Arcona share - an approximate 150% premium to the current market capitalisation of the company.
As it announced on 28 March, mutual due diligence was underway, as was the finalisation of the 2018 annual financial accounts for both companies, including the necessary third-party property valuations.
Based on the latest discussions, Secure Property Development said both parties expected to agree binding terms for part of the transaction in June, with overall completion of the transaction planned in two further steps to be executed within the second half of 2019.
The transaction remained subject to, among other things, asset and tax due diligence and regulatory approvals, as well as successful negotiating and signature of transaction documents.
Due diligence was said to be “well advanced”, with no issues uncovered to date that would obstruct the successful completion of the transaction.
“As we progress towards completing the Arcona deal in three stages over the second, third and fourth quarters of 2019, we are moving closer towards what we believe will be a value trigger event for our shareholders,” said chairman Michael Beys.
“At an estimated value of around €30m, the value assigned to our non-Greek assets which will be sold to Arcona is approximately three times higher than our current £10m market capitalisation, and that is before the value of our remaining assets is taken into account.
“Aside from crystallising the value of our assets, the Arcona deal will allow our shareholders to gain direct exposure to a much larger dividend paying, listed fund, which is focused on the European property sector.”
Chief executive officer Lambros Anagnostopoulos added that it was a “very exciting” year for the company, as it focussed on the continued development of and generating value from its asset base.
“Ss such, we are concentrating all our focus into completing this transformative deal for the benefit of our shareholders.
“We look forward to updating the market with our progress when practicable.”