Secure Property Development & Invest PLC/ Index: AIM / Epic: SPDI / Sector: Real Estate

Secure Property Development & Investment PLC ('SPDI' or 'the Company')

Corporate Update

Secure Property Development and Investment PLC (AIM: SPDI), the AIM-quoted South Eastern European focused property company, is pleased to provide a corporate update including progress being made with regards to the transaction with the Arcona Property Fund N.V. ('Arcona').

Arcona Property Fund Transaction

As previously announced, SPDI agreed to transfer its property portfolio, excluding its Greek logistics properties, to Arcona in exchange for new shares and warrants in Arcona to create a larger Central and South Eastern European focused investment vehicle ('the Transaction').

The Transaction is being implemented in three stages.  Stage One has been completed and involved the transfer of certain of SPDI's Ukrainian assets, as well as all of its Bulgarian assets, in exchange for 593,534 new shares in Arcona and 144,264 warrants over shares in Arcona (see announcements of 1 November 2019 and on 6 December 2019 for further details).

Completion of Stage Two of the Transaction has been severely disrupted by COVID-19 pandemic related business interruptions however both SPDI and Arcona have now made it a priority to complete Stage Two as soon as feasible with the relevant Sale and Purchase Agreements due to be signed in the near future.  Stage Two includes the remaining property assets in Ukraine and certain of SPDI's assets in Romania.  

Update on commercial property portfolio

SPDI's Romanian income generating assets continue to experience no adverse revenue effects from the pandemic.  As previously disclosed, this is largely due to the assets being leased to companies active in defensive sectors such as food and telecoms, sectors where trade has seen little or no disruption.   The large/anchor tenants in the Company's properties in Bucharest include Favorit, a 3PL logistics operator servicing Carrefour; Danone, the international food company; ANCOM, the Romanian Telecoms Regulatory Authority; and the supermarket chain Mega Image. In fact, ANCOM just extended its lease agreement, which was terminating in June 2021, for an additional five years.

Shareholder call

The Company intends to hold a shareholders' call within the next few weeks in order to address such matters in more detail and answer any questions raised by its shareholders.  Further details regarding the shareholder call will be provided in due course.

Michael Beys, Chairman, said; "The directors see substantial benefits in closing the Arcona deal, not least because of the €30 million of intrinsic value on offer.  As a result, we have been working toward that goal despite the pandemic and the consequent business disruption.   Signing Stage Two of the Transaction  will be a key event.  It will mark a key advancement in executing the overall Arcona Property Fund Transaction, which itself will crystallise the value of SPDI's assets, and eventually offer SPDI shareholders shares in a much larger, higher liquidity and more diversified Central and South Eastern European focused property company."

Lambros G. Anagnostopoulos, Chief Executive Officer, said; "The business disruption caused by the global pandemic over the last fifteen months has affected the progress of the Arcona transaction but, from this point onwards, we are confident that the pace will pick up and progress will be swift.  While our thoughts have been with our fellow humans who have suffered the loss of loved ones during the last year, we have worked hard to ensure that SPDI's portfolio of income generating assets has been largely insulated from the worst effects of the pandemic.   In this we have been successful.  In the meantime, we continue to be guided by our strong conviction that securing the closing of the Arcona transaction, as per our shareholders guidance, will not only result in value generation but will also create a strong platform for future growth.  With this in mind, I look forward to providing further updates on our progress." 

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

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