Itacare Capital Investments Ltd Disposal of non-core asset (1702H)

TIDMITA

RNS Number : 1702H

Itacare Capital Investments Ltd

09 July 2012

 
 Date:              09 July 2012 
 On behalf of:      Itacare Capital Investments Ltd ("Itacare Capital" 
                     or "the Company") 
 Embargoed until:   0700hrs 
 

Itacare Capital Investments Ltd

Disposal of non-core asset

Itacare Capital (AIM: ITA), the real estate investment company focused on residential projects in Brazil, announces that, as previously outlined in its Annual Report, the Company has been actively pursuing the disposal of its two non-core assets, representing 11% of the Company's NAV, to focus on its larger projects. As such, the Company is pleased to announce that it has entered into a Letter of Intent ("LOI") with WRP, LLC ("WRP"), a US private investment group, for the sale of the Company's interest in Warapuru 2 for a total consideration of $2 million.

The consideration will be paid as follows:

-- $25,000 non-refundable deposit (netted against the first payment at closing) upon execution of the LOI;

-- $1.5 million at closing, which is expected within 90 days (the "Closing Date");

-- $250,000 4 months after the Closing Date; and

-- $250,000 8 months after the Closing Date.

Further to the purchase of Warapuru 2, WRP will pay $50,000 at the Closing Date for a 12-month option to purchase 100% of the Company's interest in the Havaizinho project for $7 million.

Warapuru was valued at $3.97m as at 31 December 2011 and the disposal is therefore expected to be NAV dilutive by approximately $0.02. However, given the fact that the Warapuru developer went into bankruptcy and the associated complexities and costs of the bankruptcy process in Brazil, the Board considered this offer to be in the long-term interests of the Company. This sale provides cash today versus the uncertain outcome of a bankruptcy auction that would have led to considerable cost to the Company both in terms of time spent by the Fund's Manager and the expense to complete this process over an uncertain timeframe. The Board is pleased that with this sale the Manager will be able to devote more time and resource to building value from its remaining portfolio of investments.

A member of the Company's Investment Committee and current shareholder of the Company is also a shareholder in WRP and was therefore not involved in the internal discussions and negotiations relating to this transaction.

Michael St. Aldwyn, Chairman of Itacare Capital, commented:

"Whilst the Warapuru development is only a very small part of Itacare's portfolio, the issues caused by the developer's bankruptcy had the potential to cause considerable expense to the Company. We are very pleased to be entering into an agreement which, in accordance with our stated strategy, will enable us to focus on our core assets and ultimately deliver optimum value for our shareholders.."

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For further information:

 
 Itacare Capital Investments                 Tel: [phone] 
  Chairman, Michael St. Aldwyn 
 Itacare Capital Partners                    Tel: [phone] 
  Investment Manager, Pedro de Miranda 
 Duet Private Equity                         Tel: [phone] 
  Investment Advisor, David Mattey 
 Cenkos Securities                           Tel: [phone] 
  Stephen Keys, Adrian Hargrave (Nominated 
  adviser) 
  Russell Kerr, Alex Aylen (Sales) 
 Redleaf Polhill                             Tel: [phone] 
  Emma Kane, Henry Columbine                  E: [e-mail] 
 

Notes to Editors:

-- Itacare Capital Investments Limited is a real estate investment company focused on tourism-real estate developments in Brazil. The Company acquires large parcels of land at strategic locations that can be developed and sold to end users with the intention of achieving a minimum IRR of 25 per cent.

-- The Company invests in projects at an early development stage or in strategic land sites that can be acquired at a discount to open market value at current usage.

-- Itacare Capital focuses on beachfront parcels with particular geographic characteristics that maximize sea views and reduce the need for expensive landscaping thus translating into higher margin.

-- Itacare Capital aims to create a development that is better than the best quality development in the local area in order to achieve maximum pricing power.

-- Itacare Capital focuses on high quality residential developments that typically include a number of holiday or second home units, luxury hotels and leisure components. Approximately 70% of our portfolio is targeted to domestic buyers.

-- Further information is available at www.itacarecapital.com

This information is provided by RNS

The company news service from the London Stock Exchange

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