DUPD to sell Obolon Residences to Cheriton Overseas for $9 mln
Dragon Ukrainian Properties and Development Plc (DUPD, the Isle of Man) has announced the sale of the remaining stake in the Obolon Residences residential complex to Cheriton Overseas Limited, which is not affiliated with it, for $9 million.
According to a report by DUPD on the London Stock Exchange, these funds will be paid in cash by four installments in the period until April 30, 2018.
The fund said the fair value of the Obolon Residences project as of June 30, 2017 was estimated at $15.3 million, therefore this transaction means the loss of $6.3 million.
DUPD said that the loss for the year ended December 31, 2016 for the company’s investment in Obolon Residences was $949,000 being the fair value loss.
Board Chairman Mark Iwashko said that DUPD has previously taken the decision to proceed with developing phase 3, however, the company was also mindful of alternative options to monetise its investment in the Obolon Residences project.
"Whilst we believed that the project would deliver compelling risk-adjusted returns, this would be over a number of years. The disposal, however, provides cash consideration in the short-term, and reduces development risk for DUPD shareholders. We believe the disposal is the right decision for shareholders and is also fully supported by Dragon Capital," he said.
According to the report, in the short term, the monies will be retained for working capital purposes.
DUPD said that Cheriton Overseas Limited acquired the rights to develop phase 2 of the Obolon Residences project in February 2015. The cost of the deal was $5 million and it was paid in four equal parts.