LONDON (ShareCast) - (Sharecast News) - South eastern Europe-focussed property company Secure Property Development & Investment (SPDI) announced the transfer of all of its Bulgaria 'Boyana' assets to Arcona Property Fund on Friday, in exchange for the issue to SPDI of 315,591 new shares in Arcona and 77,201 warrants over shares in Arcona.
The AIM-traded firm said that, based on the closing price of Arcona's shares on 5 December, the transfer valued the Boyana assets at around €1.9m, excluding the issue of the warrants, while based on the current net asset value per Arcona share, it valued the assets at €4.16m, also excluding the issue of the warrants.

It said the Boyana assets, which comprised 34 apartments and two neighbouring plots of land for development in the Boyana suburb of Sofia, formed part of the first stage of the previously-announced transfer to Arcona of SPDI's property portfolio, excluding its Greek logistics properties, in exchange for new shares and warrants in Arcona to create a larger central and south eastern Europe-focussed investment vehicle.

The firm said the transfer represented the conditional closing of the second tranche of the first stage of the Arcona transaction.

It said the shares and the warrants issued to SPDI would be held in escrow, and would be released to SPDI on agreement on the terms of the extension of a loan associated with the Boyana assets, which is expected to happen by 31 December.

As it announced on 1 November, SPDI recently completed the transfer of certain of its Ukraine 'Aisi Bella' assets as part of the first stage of the Arcona transaction.

In exchange for the Aisi Bella assets, SPDI received 277,943 new shares in Arcona and 67,063 warrants which, based on the closing price of Arcona's shares on 31 October, valued those assets at €1.76m, excluding the issue of the warrants over new shares in Arcona, while based on the current net asset value per Arcona share, they were valued at €3.67m excluding the issue of warrants.

The final tranche of assets to be transferred as part of the first stage comprised SPDI's remaining Ukrainian assets, the board said, and a further announcement would be made once that final first stage tranche has been completed.

As it had previously announced, SPDI said both parties intended to complete the Arcona transaction in three stages.

The second and third stages were planned to progress to completion following the execution of the first stage, but that was now likely to be in the first quarter of 2020.

"The completion of the transfer of the Boyana assets will bring the total number of Arcona Shares issued to SPDI to 593,000, with a current market value of €3.7m, which represents more than a third of our current market capitalisation," said chairman Michael Beys.

"We have long said that the Arcona transaction was a value trigger event for SPDI shareholders.

"With stages two and three still to come, we are confident the underlying value of our portfolio of prime real estate in south eastern European countries will soon be clear for all to see."

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