ARGO Group Limited Loan to Argo Real Estate Limited Partnership (0845D)
14 Février 2020 - 12:47PM
UK Regulatory
TIDMARGO
RNS Number : 0845D
ARGO Group Limited
14 February 2020
ARGO Group Limited
14 February 2020
Argo Group Limited ("AGL" or "the Company")
Re: Loan to Argo Real Estate Limited Partnership ("ARE LP")
Argo Group Limited, the independent alternative investment
manager focused on global emerging markets, announces a EUR 10.2m
loan ("the Loan") to ARE LP, an Irish Limited Partnership. ARE LP
owns an 85% shareholding in Argo Real Estate Opportunities Fund
Limited ("AREOF") whose key asset is Riviera Shopping City ("RSC")
- an 85,000 sqm retail park in Odessa, Ukraine.
The Loan carries an interest rate of 9% with a final maturity of
July 2027. The proceeds of the Loan have been onward lent by ARE LP
to Novi Biznes Poglyady LLC ("NBP"), the asset holding company in
Ukraine which directly controls the RSC, at similar terms and in
accordance with the established norms of the National Bank of
Ukraine. This loan will enable NBP to refinance the EUR 48.7m
senior debt facility from Bank of Cyprus ("BoC") which currently
supports the RSC development.
The Loan will rank junior to the EUR 40m facility being advanced
by the European Bank for Reconstruction and Development ("EBRD").
In addition to the EUR 40m facility, the EBRD has also undertaken
to provide a further EUR 12m loan to be used to build a 25,000 sqm
extension of the RSC asset. This development, which is subject to
the granting of planning consent from the local authorities, has
the potential to significantly enhance the value of RSC. The
refinancing from the EBRD is at a lower interest rate when compared
to the BoC facility and matures in 10 years, as opposed to a final
maturity of November 2022 for the BoC facility.
The Loan will rank senior to all other borrowings of NBP and the
loan to value ratio of the financing covers the range between 52%
and 67%. As an additional benefit from the Loan, AGL will possibly
benefit from a better recovery on the outstanding EUR 8 m of unpaid
fees due from AREOF. Currently, these fees due to AGL are carried
at zero value. The Company believes the recovery of outstanding
fees is greatly enhanced by the EBRD refinancing and the offered
return is attractive compared to other alternatives.
Enquiries:
Argo Group Limited
Andreas Rialas
020 7016 7660
Panmure Gordon
Dominic Morley
020 7886 2500
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END
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