Share Placing of GBP 21.9 m

RNS Number:8285X
Bulgarian Property DevelopmentsPLC
06 June 2007



FOR RELEASE                      7.00 AM                             6 JUNE 2007



                      BULGARIAN PROPERTY DEVELOPMENTS PLC


(The Group is primarily focussed on the development of commercial property and
in particular building pre-let warehousing, distribution centres and offices)


                         Placing of New Ordinary Shares


Introduction

The Directors of Bulgarian Property Developments plc "BPD" and (the "Company")
are pleased announce proposals to raise #21.9 million (before expenses) through
a placing of 34,250,000 new Ordinary Shares (the "Placing Shares") at 64 pence
per share which have been conditionally placed with institutional investors (the
"Placing").

In order to complete the Placing, Shareholders' approval is required to allot
the Placing Shares for cash on a non-pre-emptive basis, and a circular convening
an Extraordinary General Meeting ("EGM") has been posted to Shareholders (the
"Circular").


History

BPD was incorporated in May 2004 and admitted to AIM on 4 January 2005, having
raised #4.2 million (after expenses). The Company and its subsidiaries (the
"Group") subsequently assembled and acquired a number of strategic sites in
Sofia.

In January 2006 the Company raised a further #32.9 million (after expenses) in
new equity to enable it to acquire further and larger sites with a geographical
spread involving the major cities in Bulgaria.

Since then the Group has acquired land and properties in Sofia, Plovdiv, Varna
and Pleven. Allowing for working capital requirements, the funds raised in
January 2006 are now effectively fully invested.


Strategy

Since its inception the Group has concentrated on acquiring sites and land for
commercial development in Bulgaria. It has shown over the last two years that
the process of site acquisition through plot accumulation and consolidation is a
valuable one. However, during 2006 BPD extended the Group's strategy to also
acquire large suitable sites in locations which already had zoning for
commercial use.

The Directors believe that it is appropriate for the Group to continue to
acquire additional strategic properties for development in Bulgaria and that it
should continue to do so in the immediate future rather than waiting for the
development of its current projects to be completed. Increasing numbers of
international developers and purchasers of institutional grade investments have
been coming to Bulgaria. The Group believes it has an advantage over these
newcomers as it has an existing acquisitions team in place with a proven track
record. As competition increases, good opportunities at attractive prices may
begin to diminish and BPD believes that it is important for the Group to
continue to build up its land portfolio and thus enable it to achieve advantages
of scale.


The Directors believe that by having a geographical spread of properties in the
main centres of Bulgaria the Group will have a greater appeal as it can offer a
range of possible sites to major tenants.


Warehousing

The Directors believe that there is a shortage of good quality warehousing and
distribution space and that this shortage will continue as the Bulgarian economy
grows. The Directors believe that the Group's sites in Varna, around the Sofia
Ring Road and adjacent to Sofia Airport are well placed to satisfy demand for
warehousing.


Retail

There is also a shortage of good quality retail space, although this situation
is likely to be rectified in the medium term as there are a number of
developments in the pipeline in the main cities of Bulgaria. The sites that the
Group has acquired (or is considering acquiring) for retail development are
either in areas where the Directors believe there is little competition (such as
Pleven and Vidin) or where there is competition but the properties that it has
acquired are in sufficiently good locations to offset this.


Office

The Bulgarian office market remains fragmented. Other than the Business Park
Sofia, which is fully developed, and the Business Park Varna, which is still
partly under construction, there are no significant modern office parks in
Bulgaria, although BPD believes that some may be planned both in Sofia and
elsewhere. The Directors believe that the Group's proposed office and retail
park in Sofia (the Sofia Commercial Centre) is well located to attract good
quality office tenants. BPD's logistics park in Varna will contain some modern
mid range offices.


Joint ventures

The Directors believe that where the circumstances are appropriate the Group
should be prepared to develop properties in joint ventures and as a result has
entered into a number of joint ventures with FairPlay International AD. BPD has
established a good relationship with FairPlay International ("Fairplay"), whose
principal, Mario Zahariev, has acted as an adviser to the Company since its
inception. FairPlay is one of the largest property investors and developers in
Bulgaria.

The Group's Varna and Plovdiv properties have been acquired through a 50:50
joint venture with FairPlay and the Group and FairPlay also have a joint venture
arrangement in respect of the property in Plevin.


Details of the Placing and use of proceeds

The Company is proposing to raise up to #21.9 million, before expenses, by the
issue of 34,250,000 new Ordinary Shares which have been conditionally placed
with institutional investors, pursuant to the Placing, at 64 pence per Placing
Share. Fairfax I.S. Plc ("Fairfax") and Matrix Corporate Capital LLP ("Matrix"),
as agents for the Company, have agreed conditionally to use their reasonable
endeavours to procure subscribers for the Placing Shares pursuant to the terms
of the Placing Agreement. The Placing is conditional, inter alia, upon
Shareholder approval of the Resolutions to be proposed at the EGM and upon the
Placing Shares being admitted to trading on AIM. The Placing Shares will
represent approximately 32% of the enlarged issued share capital.

Application will be made for the Placing Shares to be admitted to trading on AIM
and dealings are expected to commence on 3 July 2007. Following admission of
these shares to trading the number of ordinary shares in issue will be
106,790,657.

It is anticipated that the net proceeds of the Placing will be used to fund the
following:

* Euro13 million for the initial phases of the development and construction of the
  Group's existing projects over the next 12 months; and

* Euro17 million for the acquisition of projects in the Group's pipeline.

It is expected that these funds will be invested over the next twelve months.

The Group has started the development of the Varna Industrial Park and
anticipates that it will be in a position to commence the development of the
other principal sites during 2007 and 2008. When the development plans are
completed for all the Group's existing projects and debt finance has been
arranged, the Directors will be in a position to consider whether further equity
is required.

The EGM will be held at 15.30 on 28 June 2007, at the offices of Matrix
Corporate Capital LLP, One Jermyn Street, London, SW1Y 4UH. Copies of the
Circular will be available free of charge for 12 months from the Company's
website at www.bpdplc.co.uk and during normal business hours on weekdays
(excluding public holidays) from the date hereof until 4 July 2007 from the
Company's registered office and the offices of Field Fisher Waterhouse LLP, 35
Vine Street, London EC3N 2AA.


Enquiries:

Bulgarian Property Developments
Ivo Hesmondhalgh (Joint Chief Executive)          [phone]


Bulgarian Property Developments
Philip Pashov (Joint Chief Executive)             [phone]


Cubitt Consulting
Brian Coleman-Smith / James Versinghe             [phone]


Matrix Corporate Capital Limited
Ken Vere Nicoll                                   [phone]



Existing project summary

The following table is a summary of the Group's property portfolio and includes
Colliers' valuation of the individual properties as at 16 April 2007.

  Project        Description       BPD     Date of     Cost  Colliers          %
 Location                           %     Purchase   Euro000's Valuation     Uplift
                                                               Euro000's    on Cost
                                                                           April
                                                                            2007
                                                                         
                                                                          
VARNA
INDUSTRIAL
PARK        A Joint Venture with    50    13/10/06    6,717     8,002       19.1
            FairPlay Site size
            132,500 m(2), to
            develop 74,000 m(2)
            of warehousing with
            ancillary office &
            retail space.
Commercial
project

SOFIA
COMMERCIAL
CENTRE      Site size 87,800 m     100    01/02/07   24,649    29,389         19
            (2), to develop
            office & retail
            space.
Commercial
project

SOFIA RING
ROAD 1*     Site size 92,500 m     100   2004-2006    2,171     4,688      115.9
            (2), to develop
            warehousing/
            distribution/offices
Commercial
project

SOFIA RING
ROAD 2*     See detailed comment   100    13/12/04        -         -          -
            later.

SOFIA
AIRPORT     Site size 23,000 m     100       2005     1,264     2,075       64.2
1*          (2), to develop
            warehousing/offices
Commercial
project

SOFIA
AIRPORT     Site size 14,500 m     100       2005       924     1,281       38.6
2*          (2), to develop
            warehousing/offices
Commercial
project

PLOVDIV
RETAIL      A Joint Venture with    50    31/07/06    2,296     3,378       47.1
PARK        FairPlay Site size
            21,800 m(2), to
            develop retail space/
            shopping centre
Commercial
project

PLEVEN
RETAIL      A Joint Venture with    38    11/10/06      606       736       21.4
PARK        FairPlay Site size
            36,515 m(2), to
            develop retail space
Commercial
project

BANSKO      Site size 6,100 m(2),  100    13/04/05      506     1,082      113.8
            Full rezoning and
            building permission
            to develop
            approximately 12,000
            m(2) (net)
Residential
project

MISC SMALL
PLOTS*      Plots forming nuclei   100   2004-2006    1,077     1,514       42.0
            for future sites
                                                     40,210    52,145       29.7


* These sites have been valued on an un-rezoned basis


Both the costs shown and the valuation by Colliers relate to the percentage of
the property owned by the Group.

Cost refers to purchase cost plus expenses.



Enquiries

Ivo Hesmondhalgh                             020 7243 1336
Bulgarian Property Developments plc


Ken Vere Nicoll                              020 7925 3393
Matrix Corporate Capital LLP


James King                                   020 7598 5368
Fairfax I.S. PLC






                      This information is provided by RNS
            The company news service from the London Stock Exchange

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