UPDATE: S. African NEPI To Get EUR11.4M From Developer For Investments In Romanian Mall

South-African real estate investment fund New Europe Property Investments (NEP.RO) will receive EUR11.4 million from BelRom for the completion of the Cinema City premises in Promenada Mall Braila (Romania).

NEPI has, through two of its subsidiaries, concluded a settlement agreement with BelRom, the vendors of Promenada Mall Braila. Under the terms of the agreement, the group will receive from BelRom an early settlement amount of some EUR11.5 million payable in cash, the investment fund said in a statement sent to the Bucharest bourse Tuesday.

“The settlement amount represents amounts owed to the group by the vendors in relation to the completion of the Cinema City premises being delayed beyond the agreed timetable and exceeding the agreed budget and amounts owed or expected to be owed to the group by the vendors as a result of net operating income warranties, made by the vendors, being breached. The settlement amount will be recognized in the financial statements of the group for the six-month period ending 30 June 2012,” reads the statement.

NEPI said Promenada Mall Braila is performing well and in accordance with its expectations.

“The expansion referred to in NEPI’s 2011 annual report was completed on 10 May 2012 with the opening of H&M and C&A. The Company is considering a further expansion phase to accommodate increasing demand for retail space from tenants,” reads the statement.

NEPI bought Promenada Mall Braila in October 2009 from BelRom for EUR63 million.

NEPI said Monday its profit attributed to equity holders stood at EUR926,000 in the first quarter of the year, and rental revenues amounted to EUR9.7 million.

Results for the same interval in 2011 are not available.

Its profit before taxation hit EUR1.6 million and net finance expenses stood at EUR3.7 million, compared to EUR4.9 million in 2011.

Distributable earnings stood at EUR5.4 million in the first quarter, compared to EUR23 million a year ago.

Total equity attributable to equity holders increased 3.6% in the first quarter to EUR243.7 million, from EUR235.2 million at the end of 2011.

NEPI had debts of EUR220.7 million at the end of March, up 16% from EUR190 million at the end of last year.

NEPI said it raised EUR43.2 million after it has placed a total of 13,505,201 new ordinary shares in the company with shareholders registered in the United Kingdom. The money will be used for acquisitions and development.

“The issue price of EUR3.20 represents a 6.8% discount to the 30 business day volume weighted average traded price prior to the date that the private placement was agreed between NEPI and the parties subscribing for the new shares. The proceeds of the private placement will be used to fund developments and acquisitions of further operating assets,” NEPI said in a statement for the Bucharest bourse.

The investment fund will pay EUR81 million for office building City Business Centre Timisoara, which it took over at the end of the year, according to a report by realty services firm Jones Lang LaSalle.

NEPI is the first property fund listed on the Bucharest bourse, on a dedicated segment for real estate investment trusts (REITs). The fund is also listed in Johannesburg and London.

NEPI shares were last traded on May 8, when they closed up 0.8% at 15.2 lei. (EUR1=RON4.4411)