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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Bulgarian Prop. | LSE:BPD | London | Ordinary Share | GB00B058TT05 | ORD 25P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 16.50 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number:7820J Bulgarian Property DevelopmentsPLC 12 December 2007 FOR IMMEDIATE RELEASE 12 DECEMBER NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM AUSTRALIA, CANADA, JAPAN OR THE UNITED STATES BULGARIAN PROPERTY DEVELOPMENTS PLC ("BPD") RULE 29 VALUATION CERTIFICATE BPD made its preliminary announcement of results for the year ended 30 June 2007 on 27 November 2007. In that announcement, the Directors included a summary of the valuation of the properties in BPD's portfolio carried out by Colliers CRE. Colliers CRE has now completed its Valuation Report. The Valuation Certificate, prepared in compliance with Rule 29 of the City Code on Takeovers and Mergers, is set out below. The individual property reports will not be published or put on display as the Takeover Panel has agreed such disclosure could be commercially disadvantageous to BPD. Colliers CRE has consented to publication of its Valuation Certificate. Colliers CRE's valuation, adjusted for cash and other assets and liabilities, results in a NAV on a Current Value basis of between 75p and 90p per BPD share (depending on the outcome of an application for an increase in density at the Sofia Central Commercial Site) and of between 84p and 98p per share on a discounted Gross Development Value basis (as set out in the preliminary announcement dated 27 November 2007). Enquiries: Bulgarian Property Developments Christian Williams (Chairman) +44 (0) 20 7488 0778 Ivo Hesmondhalgh (Joint Chief Executive) +44 (0) 20 7243 1336 Matrix Corporate Capital LLP (Nominated Adviser) Ken Vere Nicoll +44 (0) 20 7925 3388 Fairfax I.S. PLC (Adviser and Broker) Simon Stevens +44 (0) 20 7598 4034 Cubitt Consulting Michael Henman +44 (0) 20 7367 5100 James Verstringhe Colliers CRE Valuation Certificate Your Ref Our Ref G:/International/CFT/Projects/BulgarianPropertyDevelopments/Certificate Date 12 December 2007 9 Marylebone Lane London W1U 1HL Tel: 020 7935 4499 Fax: 020 7487 1800 www.collierscre.com Direct Line +44 20 7344 6609 Direct Fax +44 20 7344 6539 Mobile +44 7768 500202 Chris.Fowler-Tutt@collierscre.co.uk The Directors Bulgarian Property Developments Plc 166 Portobello Road London W11 2EB Advisors to Bulgarian Property Developments Plc The Directors The Directors Fairfax Mergers & Acquisitions Matrix Corporate Capital LLP 46 Berkeley Square One Jermyn Street London London W1J 5AT SW1Y 4UH Dear Sirs BULGARIAN PROPERTY DEVELOPMENTS PLC (BPD) PORTFOLIO OF DEVELOPMENT SITES In accordance with your instructions, we have inspected the above properties in order to provide you with our opinion of their Market Value, as at today's date, for the purpose of meeting the requirements of Rule 29 of the City Code on Takeovers and Mergers. STATUS OF VALUER AND INSPECTIONS The properties have been inspected and valued by suitably qualified valuers who fall within the requirements as to competence as set out in PS 1.1 and 1.2 of the Appraisal and Valuation Standards (the "Red Book") issued by the Royal Institution of Chartered Surveyors (the "RICS"). We confirm that Colliers CRE falls within the definition of Independent Valuers and that we have no conflict of interest in acting on your behalf on this matter and that we hold adequate Professional Indemnity Insurance. These properties have also been previously valued by Colliers International in Bulgaria for the purpose of financial reporting. The General Assumptions and Definitions form Appendix I to this report. The properties were inspected during September 2007 by Kristian Engley MRICS and Lachlan Stewart GAPI and supervised by Christopher Fowler-Tutt BSc MRICS. COMPLIANCE This appraisal has been prepared in accordance with the International Valuation Standards 2005 and the RICS Appraisal and Valuation Standards (the "Red Book"). In the context of the valuation Colliers CRE act as an Independent Valuer. The valuers do not have any direct or indirect personal or corporate relationships with the property or Company that is the subject of this assignment and that might lead to a potential conflict of interest. This engagement has been performed independently and without bias toward the client or others. We have complied with the code of conduct and adhered to the ethical standards set out in the RICS Appraisal and Valuation Standards. Brief Description OF PORTFOLIO The portfolio comprises sixteen mostly 'green field' development sites in Bulgaria. Eight of the properties are located in the capital city Sofia, with the remaining properties in Bankso, Plovdiv, Pleven, Burgas, Rousse, Sandanski, Vidin and Varna. Within Sofia, two of the properties are located within close proximity to the Sofia International Airport. The agricultural land surrounding the airport is currently being redeveloped into logistics, office and 'bulky goods' properties. A further five properties are located on the eastern and south eastern portion of the Sofia Ring Road. Two of these properties are currently land locked and we consider that additional adjoining land would need to be acquired to create a potential development site. One of the holdings incorporates three small properties fronting the western alignment of the ring road, south of Ring Road Site 1, and we have been advised by BPD that these sites have been acquired for strategic purposes. The final property within Sofia is situated to the south of the city centre, in an area that has been referred to as Sofia Central Commercial Site, with a land area of approximately 87,000m(2). This property features various industrial buildings of circa 1960's construction in a poor condition. It is proposed to redevelop the site into a new Business Park with approximately 130,000m(2) of building area. Bankso is a ski resort location, and is zoned for residential use. It has a land area of 6,094m(2), with development approval for a building footprint of 2,097m (2) and a total built-up area of 10,781m(2). Plovdiv is a green field development site with a total area of 21,830m(2). It is proposed to develop a retail shopping centre, with a total area of approximately 36,454m(2). Pleven is a green field development site with a total area of 36,755m(2). It is proposed to develop the site in two stages with the first stage comprising 19,793m(2) of built-up area. From discussions with BPD, stage two comprises of approximately 12,000m(2) of built-up area for use as 'bulky goods'. Burgas is a green field site that fronts the main road leading from Burgas to Sofia. Access to the site is only available in an easterly direction from the dual carriageway. This site is currently zoned for agricultural use. Rousse is an industrial development site within a new industrial estate. This site has recently been purchased from the municipality, with several conditions written into the contract of sale. It is proposed to develop an industrial warehouse facility of approximately 17,000m(2). Sandanski is a retail development site of 19,615m(2). It is proposed to develop the site into a retail shopping centre of approximately 15,000m(2). We have been provided with basic architectural sketches outlining the proposed development. Vidin is a retail/office development site of 11,716m(2) situated to the north of the town centre. The site was previously used as a cinema, which has been largely demolished. No planning or concept design has been approved for the site as yet. Varna is an industrial development site of 132,500m(2). The site is currently features various industrial buildings of circa 1960's construction in a poor condition. The site is currently being redeveloped and renamed the Logistics Park Varna, with the first phase already under construction. All of the properties are described in greater detail in the individual reports attached hereto. SITE AREAS For the purpose of this report and valuation, we have relied upon the schedule of areas supplied by BPD, as reproduced in the property reports annexed hereto. We reserve the right to revisit our valuation at a later date should any of the information provided by BPD change in anyway. TENURE We have solely relied upon the information provided by BPD and, except where you have advised us to the contrary, or our other enquiries have alerted us otherwise, our valuation assumes the properties are all held freehold with a clean and marketable title, and that there are no unusual, onerous or restrictive covenants in the titles which are likely to materially affect our values reported herein. If our assumption is proven to be incorrect then we reserve the right to revisit our valuation. ENVIRONMENTAL MATTERS We have relied upon the environmental information provided by BPD and unless you have advised us otherwise, we have assumed that there are no environmental matters which would impact on our valuations reported herein. We have also assumed that the information and opinions we have been given are complete and correct in respect of each property and that further investigations would not reveal more information sufficient to affect value. PLANNING In conjunction with our local Colliers office in Sofia we have, where possible, made verbal planning enquiries of the local municipality with respect to each site where it has been rezoned. Where no such zoning has occurred we have made what we consider to be reasonable assumptions as to its planning potential given our knowledge of the individual locations. We have also relied upon the zoning information and opinions provided by BPD for the purpose of this report and valuation. We have assumed that the information we have been given is accurate and complete for each property. Should our assumptions prove to be incorrect at a later date, we reserve the right to revisit our valuation reported herein. In accordance with Clause (d) subsection (iv) of Rule 29.2 we confirm that, with the exception of Varna and Bankso, planning consent has not yet been granted on any of the properties. We discuss this in more detail in the individual reports attached hereto. We have been provided with copies of the building design and approval, power and water supply diagrams and technical drawings for the development of the Bankso site by BPD. Notwithstanding that the plans and documentation supplied to us is mostly in Bulgarian, we have had sight of several translated documents. These documents, together with our discussions with BPD, confirm that the subject site has zoning and building approval dated 7 July 2007, to allow for the construction of the proposed development, outlined in the attached property report. We have also been provided with a signed and dated letter from BPD stating that the development site at Varna has construction/building approval for Phase 1, being the development of the warehouse and office space. The letter also states that this approval was obtained on 27 February 2007. We have been further advised that the construction approval for Phase 2 is expected in the short term, with approval for the warehouse element of this Phase obtained on 5 July 2007. The original planning documents have not been provided to us, as all the documentation is written in Bulgarian and we have therefore relied upon the information provided by BPD. MARKET OVERVIEW Bulgaria joined NATO in 2004 and the EU in January 2007. During the first half of the 1990s Bulgaria's economy shrunk dramatically owing to the loss of the COMECON markets, and UN sanctions against its major trading partner Yugoslavia. In 1994, GDP began to show signs of growth and inflation fell for the first time since transition commenced in 1990 and the collapse of the economy in 1996 due primarily to an unstable banking system. Since 1997 the economy has gradually recovered due to sound macroeconomic policies and a broad structural reform programme. Since 2000, GDP has grown at 4% to 6% per annum and is forecast to grow by similar levels in 2007 and 2008. Bulgaria macroeconomic data and forecasts 2005 2006e 2007f 2008f 2009f Nominal GDP (Euro bn) 21.4 24.4 27.5 30.5 33.5 Per capita GDP (Euro) 2,780 3,170 3,590 4,010 4,420 Real GDP, yoy (%) 5.5 6.3 6.5 6.3 6.2 Inflation (CPI), yoy, avg (%) 5 7.3 6.2 4.7 3.6 Unemployment rate (%) 10.7 9.1 8 7.5 7 Exchange rate/Euro, avg 1.96 1.96 1.96 1.96 1.96 1M SOFIBOR (1), avg of the year 2.7 3.7 4.2 4.1 3.9 Current account/GDP (%) -11.3 -14.7 -14.2 -11 -9.5 FDI/GDP (%) 10.8 15.5 14 10.5 9 General government debt/GDP (%) 31.9 25 24.5 23 22 Budget balance/GDP (%) 2.3 3.5 2 1.5 1 Total external debt/GDP (%) 71.4 75 81 83.5 86 (1) Prior to SOFIBOR introduction yield on 3M treasury bonds was used as a benchmark interest rate. e - Estimate f - Forecast Source: Bank Austria Bulgaria's dynamic GDP and per capita income growth rates and increasing economic integration since 2000 have been driven by domestic consumption and investment. Bulgaria's GDP per head in 2005 was circa $3,500. The country remains the poorest of the CEE states (excluding Russia and Ukraine). Its estimated GDP per capita in 2006, even at Purchasing Power Parity, was just 30% of the EU15 average, 35% of the EU25 average and 53% of the EU8 average. The reform programme launched in the late 1990s led to a steady fall in inflation. During the 2003 - 2006 periods, however, inflation has varied between 2.3% and 7.3%. Given the rapid GDP growth, it will be difficult to bring down inflation much further in the short term which presents a threat to the country's targeted accession to the Eurozone in 2010. Bulgarian's unemployment level has also been falling since 2000, reaching circa 9% by year end 2006. This is the lowest level since the beginning of transition and compared with approximately 19% in 2000. The biggest constraint on growth and risk to underlying economic stability in Bulgaria has been its trade deficit. Estimated at approximately 15% of GDP in 2006, it is the highest in the CEE region and is forecast to remain in double figures until at least 2008. Furthermore, Bulgaria's fixed exchange rate has made it difficult for Bulgarian exports to remain competitive. Surging inflows of capital goods in recent years, however, will continue to stimulate export growth, providing sufficient financing for the current account shortfall and as such mitigating much of the associated risk. Growth Drivers Bulgaria's tourism sector generated more than Euro2 billion of revenue in 2006 from four million visitors enjoying its sun, sand and sea along its 354km of Black Sea Coast, skiing opportunities in the winter and mountain landscapes in the interior. The sector accounted for approximately 14% of Bulgaria's GDP in 2006 and accounts for more than 140,000 jobs. Bulgaria's accession to the EU is contributing to a boom in tourism, raising its profile as a major emerging travel destination. Post EU accession, the number of foreign tourists in Bulgaria have jumped by at least 10% in 2007 and a forecast by the World Tourism Organisation indicates that by the year 2010, the number of tourists in visiting the country will annually exceed 20 million. Since 2003, Bulgaria has seen booming interest from foreign investors. The driving forces have been the EU accession process and membership; the highly-skilled multilingual workforce with the EU's most competitive wage; a stable and predictable business environment; the lowest operational costs and tax rate in the EU and tax exemption and investment incentives for qualified investors. Between January and November 2006, the state exchequer received Euro3.2 billion of inward investments. This equates to approximately 13% of GDP and more than 100% of current account deficit. Bulgaria has the highest level of FDI as a percentage of GDP in the CEE region. Retail The retail sector is demonstrating significant performance at present throughout Bulgaria. While Bulgaria has less than 8 million inhabitants, the competition between retailers to secure a share of a growing market has been strong. Existing retailers are expanding their nationwide chains whilst new entrants across the sectors are searching for entry sites. The food retail, hypermarket, electronics, DIY and home furnishing sectors have driven the expansion of the retail sector and 2007 - 2008 will see several international retailers enter the market. The lack of suitable plots of land in good locations with favourable logistics, however, is a considerable constraint on the retail market. In the larger cities, such locations have largely been secured, either by competitors or by companies holding out for the best offers. This has in many cases led to competitors having to stand in close proximity to each other. The following table illustrates the major retail developments in Sofia both completed and under construction. Name Investor/Developer GLA (m(2)) Status Completion TZUM Atlas Invest AD 19,000 existing 1999 Mall of Sofia GE/Quinlan 21,500 existing 2006 Private CCS Equest 20,000 existing 2006 Sky City Fantastico 15,000 existing 2006 Carrefour Mall Carrefour 66,000 under 2009 construction Serdika Shopping Centre ECE 52,000 under 2009 construction Akropolis Complex Sofiyski 100,000 under 2010 Akropolis construction Bulgaria Mall London Sofia 49,500 under 2009 construction Property/Salama nca Capital Investments Riofisa Complex Riofisa 85,000 project Olympian Mall and Tower Eurocapital 45,000 project n/a Finance DiVi South Mall Kondor 20,000 project 2010 Mall Tzarigradski Sofia Building 50,000 under 2009 construction Enterprises Evropa Park ECE 70,000 project 2010 Proektmanagemen t San Stefano Plaza Balkanstroy/San 13,600 under n/a construction Stefano Property Developments The shopping centre market is currently under-supplied throughout the country with queues of international retailers competing for any available space. In Sofia, a city of up to 1.8 million inhabitants, the market consists of just two large western standard malls; Mall of Sofia and CCS, both of which opened in 2006. Only one mall has opened outside Sofia, in Veliko Turnovo. Large supply pipelines are in place in most cities however. Whilst Sofia will wait until late 2008 and 2009 for its next new mall, three new shopping centres will open in fast developing Varna between mid 2007 and early 2008, whilst two new schemes are scheduled to open in Plovdiv by late 2008. Offices Sofia's office market is one of the smallest capital city markets in the CEE region. Total modern stock by the end of 2006 reached 157,000m2, which is smaller than the regional Polish cities of Wrocklaw and Krakow and only slightly bigger than the Czech city of Brno. It is estimated that only 30,000m2 will come onto the market in 2007, leading to an undersupply situation as annual demand is in the 40 - 50,000m(2) range and rising. A large supply pipeline of 300-400,000m(2) is in place, however, most will be built out through 2008-2011. Larger projects include Spanish developers Riofisa's 100,000m(2) mixed used scheme behind the central train station and a planned 80,000m(2) scheme from established Sofia developer Soravia on Tsarigradsko Shose. Few plots remain in the city centre for development. Further projects are concentrated on and around the major road arteries and boulevards branching out from the city centre e.g. Tsarigradsko (south east to the airport), Tsar Boris III (south west) and Todor Alexandrov (west) as well as the southern section of the ring road where the Business Park Sofia is located. Office demand will continue to be driven by company expansions rather than new entrants. Most international companies have already established a presence in Sofia, although several large requirements are on the market from companies who have waited until EU accession has been secured to enter the market. Industrial Despite the strong recent economic growth, Bulgaria's internal warehouse and industrial market is still relatively small. The existing warehouse stock, throughout Bulgaria, almost entirely comprises older inefficient facilities built before 1990. As a result of the lack of space for letting and the absence of developers with experience, larger companies have built warehouses for themselves and sublet unused space where necessary. The logistic market remains the least developed and most undersupplied of the commercial sector in Sofia. Rising land prices in the capital have deterred developers from launching projects. The first signs of an emerging development market appeared in the last 18 months however, trigged by Bulgaria's economic growth, a rising occupier interest in higher quality facilities, accession to the EU, growing inward foreign investment and the rapid development of the retail sector. A number of new developments around the airport in Druzhba, Vrazhdebna and Slatina are rented out, e.g. DHL's facility, while new industrial zones are emerging around the ring road. One scheme dominates the Sofia supply pipeline. Tishman International's Sofia Airport Centre (SAC) scheme, located 300 metres from the new airport terminal, will be constructed over the next two to three years. SAC is a 165,000m(2) Class A Business Park incorporating 22,000m(2) of high specification logistic space for warehouse and light industrial use (as well as 100,000m(2) of offices and a high-end hotel). Outside Sofia, the most likely development locations are those on the Pan European transport corridors - the new cross country motorways, and the Danube River - near the Black Sea Ports of Varna and Bourgas. A 100,000m(2) logistic park is planned for Varna while Plovdiv is already home to three industrial parks. MARKET VALUES We are of the opinion that the aggregate Market Value, as at today's date, of the BPD portfolio of development sites, subject to a good and marketable title, as detailed in the attached schedule is Euro75,020,000 (Seventy Five Million, Twenty Thousand Euros). This figure is net of purchaser's costs of 3.5%. The valuations of the individual properties form Appendix II to this report. In accordance with Rule 29.2 Clause (d) our individual reports attached hereto also address the following: i. The value after the development has been completed. ii. The value after the development has been completed and let iii. The estimated total cost, including carrying charges, of completing the development and the anticipated dates of completion and of letting or occupation. iv. A statement whether planning consent has been obtained and, if so, the date thereof and the nature of any conditions attaching to the consent which affect the value. A summary of the figures are set out in the Appendices III, IV, V and VI respectively. SPECIAL REMARKS 1. In respect of those sites that are partially owned we have assessed the Market Value of the site as a whole and then apportioned this value according to the proportion of ownership by BPD. We are of the opinion that we have had access to sufficient information to carry out a valuation on these assets which are partially owned. 2. In order for the valuations reported in the attached schedules to be achieved, the developments would need to be constructed as described in the individual reports attached hereto. Our valuations assume that the developments have been completed at today's date. Whilst we consider these scenarios realistic in the current market any alteration in the actual development may lead to a change in value. 3. In accordance with your instructions we have reported our opinions of values both on a net of purchaser's costs and a gross of purchaser's costs basis. Purchaser's costs have been assessed at 3.5%. LIABILITY AND PUBLICATION This report and valuation has been provided exclusively for the use of the addresses for the purposes set out herein. We do not accept any responsibility to any third party for the whole or any part of its contents. Neither the whole nor any part of this valuation or any reference thereto may be included within any published document, circular or statement nor published in anyway nor disclosed orally to a third party, without our prior written consent to the form and context of such publication or disclosure. Such approval is required whether or not Colliers CRE are referred to by name and whether or not the report is combined with others. In breach of this condition, no responsibility can be accepted to third parties for the comments or advice contained in this report. Yours faithfully Christopher J Fowler-Tutt BSc MRICS Director For and behalf of Colliers CRE APPENDIX I GENERAL ASSUMPTIONS AND DEFINITIONS GENERAL ASSUMPTIONS & DEFINITIONS The valuations have been prepared by a suitably qualified valuer, as defined by PS1.1 of the Appraisal and Valuation Standards, on the basis set out below unless any variations have been specifically referred to under the heading "Special Remarks": 1 Market Value (MV) Where we have been instructed to value the properties on the basis of Market Value, we have done so in accordance with PS 3.2 of the Appraisal and Valuation Standards issued by The Royal Institution of Chartered Surveyors, which is defined as follows: "The estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm's-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion." The interpretative commentary on Market Value, as published in International Valuation Standards 1, has been applied. 2 Market Rent (MR) Valuations based on Market Rent (MR), as set out in PS 3.4 of the Appraisal and Valuation Standards, adopt the definition as settled by the International Valuation Standards Committee which is as follows: 'The estimated amount for which a property, or space within a property, should lease (let) on the date of valuation between a willing lessor and a willing lessee on appropriate lease terms in an arm's-length transaction after proper marketing wherein the parties had acted knowledgeably, prudently and without compulsion.' MR will vary significantly according to the terms of the assumed lease contract. The appropriate lease terms will normally reflect current practice in the market in which the property is situated, although for certain purposes unusual terms may need to be stipulated. Matters such as the duration of the lease, the frequency of rent reviews, and the responsibilities of the parties for maintenance and outgoings, will all impact on MR. In certain States, statutory factors may either restrict the terms that may be agreed, or influence the impact of terms in the contract. These need to be taken into account where appropriate. The principal lease terms that are assumed when providing MR will be clearly stated in the report. Rental values are provided for the purpose described in this report and are not to be relied upon by any third party for any other purpose. 3 Rental Assessment Unless stated otherwise within the report, our valuations have been based upon the assumption that the rent is to be assessed upon the premises as existing at the date of our inspection. 4 Reinstatement Valuation If we have prepared Reinstatement Values we will not have carried out a detailed cost appraisal and the figures should therefore be considered for guidance purposes only. 5 Purchase and Sale Costs In arriving at our opinion of value we have allowed for purchaser's costs of 3.5% . This reflects 2% for land tax with the remainder being apportioned between agents and legal fees. 6 Measurements In accordance with your instructions we have relied upon the floor plans and areas provided by the Borrower. Floor areas are provided for the purpose described in this report and are not to be relied upon by any third party for any other purpose. 7 Condition Unless otherwise stated within the report, we have not carried out a building survey, nor have we inspected the woodwork or other parts of the structures which are covered, unexposed or inaccessible and we are, therefore, unable to report that such parts of the properties are free from rot, beetle or other defects. Where we have noticed items of disrepair during the course of our inspections, they have been reflected in our valuations, unless otherwise stated. None of the services, drainage or service installations was tested and we are, therefore, unable to report upon their condition. We have not been provided with a Technical Due Diligence Report. 8 Environmental Matters Unless otherwise stated within the report, we have not carried out soil, geological or other tests or surveys in order to ascertain the site conditions or other environmental conditions of the properties. Unless stated to the contrary within the report, our valuation assumes that there are no unusual ground conditions, contamination, pollutants or any other substances that may be environmentally harmful. We have not been provided with an Environmental Report. 9 Fixtures and Fittings In arriving at our opinions of value we have disregarded the value of all process related plant, machinery, fixtures and fittings and those items which are in the nature of tenants' trade fittings and equipment. We have had regard to landlords' fixtures such as lifts, escalators, central heating and air conditioning forming an integral part of the buildings. Where the properties are valued as an operational entity and includes the fixtures and fittings, it is assumed that these are not subject to any hire purchase or lease agreements or any other claim on title. No equipment or fixtures and fittings have been tested in respect of Electrical Equipment Regulations and Gas Safety Regulations and we assume that where appropriate all such equipment meets the necessary legislation. Unless otherwise specifically mentioned the valuation excludes any value attributable to plant and machinery. 10 Tenure, Lettings and Reports on Title and/or Tenancies Unless otherwise stated, we have not inspected the title deeds, leases and related legal documents and, unless otherwise disclosed to us, we have assumed that there are no onerous or restrictive covenants in the titles or leases which would affect the value. 11 Taxation Whilst we have had regard to the general effects of taxation on market value, we have not taken into account any liability for tax which may arise on a disposal, whether actual or notional, and neither have we made any deduction for Capital Gains Tax, Valued Added Tax or any other tax. 12 Mortgages We have disregarded the existence of any mortgages, debentures or other charges to which the properties may be subject. 13 Operational Entities Where the properties are valued as an operational entity and reference has been made to the trading history or trading potential of the property, reliance has been placed on information supplied to us. Should this information subsequently prove to be inaccurate or unreliable, the valuations reported could be adversely affected. Our valuations do not make any allowance for goodwill 14 Local authorities, Statutory Undertakers and Legal Searches We have not made any formal searches or enquiries in respect of the properties and are therefore unable to accept any responsibility in this connection. We have, however, made informal enquiries of the local planning authority in whose areas the properties are situated as to whether or not they are affected by planning proposals. We have not received a written reply and, accordingly, have had to rely upon information obtained verbally. 15 Arrears We have assumed that all rents and other payments payable by virtue of the leases have been paid to date. If there are rent or other arrears, we recommend that we should be informed in order that we may consider whether our valuation should be revised. 16 Insurance In arriving at our valuation we have assumed that the buildings are capable of being insured by reputable insurers at reasonable market rates. If, for any reason, insurance would be difficult to obtain or would be subject to an abnormally high premium, it may have an effect on value. 17 Liability Cap We confirm that the extent of our liability in respect of this valuation and report is limited to a maximum sum of £50 million. 18 Standard Terms of Business We confirm that this valuation report has been provided in accordance with our Standard Terms of Business. APPENDIX II MARKET VALUES MARKET VALUES Property Market Value BPD % ownership BPD's share of Euro Market Value Euro Sofia Ring Road 1 6,850,000 100 6,850,000 Sofia Ring Road 2 1,215,000 100 1,215,000 Krivina 3 140,000 100 140,000 Kazichene (railway) 640,000 100 640,000 Hadjijnista (mines) 300,000 100 300,000 Airport site 1 3,450,000 100 3,450,000 Airport site 2 2,385,000 100 2,385,000 Commercial Park Sofia 36,500,000 100 36,500,000 Bansko 1,160,000 100 1,160,000 Plovdiv 7,480,000 50 3,740,000 Pleven 2,240,000 38 850,000 Varna 28,300,000 50 14,150,000 Vidin 2,180,000 50 1,090,000 Burgas 800,000 100 800,000 Sandanski 900,000 50 450,000 Russe 1,300,000 100 1,300,000 Total Euro95,840,000 Euro75,020,000 These figures are net of purchaser's costs. APPENDIX III VALUE AFTER THE DEVELOPMENT HAS BEEN COMPLETED VALUE AFTER THE DEVELOPMENT HAS BEEN COMPLETED Property Gross BPD % BPD's share of BPD's share of ownership Gross Net Market Market Value1 Market Value2 Value1 Euro Euro Euro Sofia Ring Road 1 31,050,000 100 31,050,000 30,000,000 Sofia Ring Road 2 5,900,000 100 5,900,000 5,700,000 Krivina 3 n/a 100 n/a n/a Kazichene (railway) n/a 100 n/a n/a Hadjijnista (mines) n/a 100 n/a n/a Airport site 1 10,870,000 100 10,870,000 10,500,000 Airport site 2 7,700,000 100 7,700,000 7,430,000 Commercial Park Sofia 145,275,000 100 145,275,000 140,200,000 Bansko 13,138,000 100 13,138,000 12,680,000 Plovdiv 26,800,000 50 13,400,000 12,930,000 Pleven 15,850,000 38 6,023,000 5,820,000 Varna 42,600,000 50 21,300,000 20,555,000 Vidin 13,280,000 50 6,690,000 6,455,000 Burgas n/a 100 n/a n/a Sandanski 9,000,000 50 4,500,000 4,350,000 Russe 7,925,000 100 7,925,000 7,650,000 Total Euro329,388,000 Euro273,771,000 Euro264,270,000 1 These figures are gross of purchaser's costs 2 These figures are net of purchaser's costs APPENDIX IV VALUE AFTER THE DEVELOPMENT HAS BEEN COMPLETED AND LET VALUE AFTER THE DEVELOPMENT HAS BEEN COMPLETED AND LET Property Gross Market BPD % BPD's Share of BPD's Share of Value1 ownership Gross Net Euro Market Value1 Market Value2 Euro Euro Sofia Ring Road 1 46,678,000 100 46,678,000 45,050,000 Sofia Ring Road 2 8,826,000 100 8,826,000 8,520,000 Krivina 3 n/a 100 n/a n/a Kazichene (railway) n/a 100 n/a n/a Hadjijnista (mines) n/a 100 n/a n/a Airport site 1 15,223,000 100 15,223,000 14,700,000 Airport site 2 10,891,000 100 10,891,000 10,500,000 Commercial Park Sofia 222,098,000 100 222,098,000 214,325,000 Bansko 13,138,000 100 13,138,000 12,680,000 Plovdiv 40,280,000 50 20,140,000 19,435,000 Pleven 24,184,000 38 9,190,000 8,870,000 Varna 77,302,000 50 38,651,000 37,300,000 Vidin 17,320,000 50 8,660,000 8,350,000 Burgas n/a 100 n/a n/a Sandanski 12,750,000 50 6,375,000 6,150,000 Russe 10,536,000 100 10,536,000 10,170,000 Total Euro499,226,000 Euro410,406,000 Euro396,050,000 1 These figures are gross of purchaser's costs 2 These figures are net of purchaser's costs APPENDIX V SHARE OF TOTAL COSTS SHARE OF TOTAL COSTS Property BPD % ownership Total Cost1 to BPD Euro Sofia Ring Road 1 100 26,248,768 Sofia Ring Road 2 100 5,281,476 Krivina 3 100 n/a Kazichene (railway) 100 n/a Hadjijnista (mines) 100 n/a Airport site 1 100 8,113,313 Airport site 2 100 5,932,777 Commercial Park Sofia 100 115,376,973 Bansko 100 8,181,111 Plovdiv 50 12,248,662 Pleven 38 6,185,013 Varna 50 17,567,721 Vidin 50 5,536,120 Burgas 100 n/a Sandanski 50 4,257,520 Russe 100 6,761,873 Total Euro221,691,327 1 Excludes land value and acquisition costs. APPENDIX VI ESTIMATED DEVELOPMENT TIME FRAME ESTIMATED DEVELOPMENT TIME FRAME Property Total Time Frame for Development (mths) Sofia Ring Road 1 48 Sofia Ring Road 2 19 Krivina 3 n/a Kazichene (railway) n/a Hadjijnista (mines) n/a Airport site 1 36 Airport site 2 36 Commercial Park Sofia 71 Bansko 24 Plovdiv 36 Pleven 49 Varna 30 Vidin 25 Burgas n/a Sandanski 27 Rousse 19 Dealing Disclosure Requirements Under the provisions of Rule 8.3 of the Takeover Code (the 'Code'), if any person is, or becomes, 'interested' (directly or indirectly) in 1 per cent or more of any class of 'relevant securities' of BPD, all 'dealings' in any 'relevant securities' of that company (including by means of an option in respect of, or a derivative referenced to, any such 'relevant securities') must be publicly disclosed by no later than 3.30 pm (London time) on the London business day following the date of the relevant transaction. This requirement will continue until the date on which the offer becomes, or is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or on which the 'offer period' otherwise ends. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an 'interest' in 'relevant securities' of BPD, they will be deemed to be a single person for the purpose of Rule 8.3. Under the provisions of Rule 8.1 of the Code, all 'dealings' in 'relevant securities' of BGP, or by any of their respective 'associates', must be disclosed by no later than 12.00 noon (London time) on the London business day following the date of the relevant transaction. A disclosure table, giving details of the companies in whose 'relevant securities' 'dealings' should be disclosed, and the number of such securities in issue, can be found on the Takeover Panel's website at www.thetakeoverpanel.org.uk. 'Interests in securities' arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an 'interest' by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities. Terms in quotation marks are defined in the Code, which can also be found on the Panel's website. If you are in any doubt as to whether or not you are required to disclose a 'dealing' under Rule 8, you should consult the Panel. This information is provided by RNS The company news service from the London Stock Exchange END DOCFFLFMESWSEEE
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