7th October 2008
Develica Deutschland Ltd buys back 21.3m shares and enhances net asset value
Develica Deutschland Ltd (“Develica” or “DDL” or “the Company”) today announces that it has bought back 21,298,000 ordinary shares in the Company for a total cost of €2.8m, equivalent to €0.13 a share, satisfied from its own cash reserves. The shares, which will be held in treasury, have been acquired in two tranches: 12,600,000 shares were purchased on 6 October 2008 and the remainder today, 7 October 2008. All the shares were purchased at €0.13 each.
The Board of Develica has taken this opportunity of buying the Company’s shares while they are at levels which represent a considerable discount to the last stated net asset vale (“NAV”) of €0.70 per share as reported last month for the year to 31 March 2008. As a result of those shares purchased, and assuming their cancellation, the NAV of the shares remaining in issue is estimated to by €0.75, based on the 31 March 2008 independent valuation.
Derek Butler, Develica’s Chairman, said: “While the Board is aware of the ongoing pressure on the portfolio’s loan-to-value covenants, and continues to monitor the situation closely, it was decided to acquire as many shares as is possible under our current mandate while the price was at such a deep discount to our last reported NAV. Although we believe that conserving cash is of paramount importance to the Company, the opportunity to enhance shareholder value by more than 7% by utilising our extremely strong and positive cash flow was totally justified as being in the best interests of all shareholders The Board also believes that any further purchases under the buy-back programme will continue to enhance NAV per share.”
As the Company stated in its year-end results released last month, Develica is generating more than €70m of annualised rental income against interest charges, including amortisation, of approximately €50m.
The Company remains alert to sentiment in the German commercial property market as well as the continuing uncertainty surrounding the world’s financial markets. Strategic disposals from with the portfolio will continue to be considered as outlined in the Investment Manager’s Review in the year-end results. A further update will be provided to shareholders in due course.
Contact:
Derek Butler, Chairman, Develica. Tel: 020 7016 1860
Baron Phillips, Baron Phillips Associates. Tel: 020 7920 3161
Philip Secrett, Grant Thornton UK LLP. Tel: 020 7728 2758