Appeninn - Closing Of A Plot Acquisition At Balaton.
Appeninn - Equity Note
Recommendation: Accumulate
Target price (12M): HUF 743
Closing an acquisition at Balaton
- Appeninn on Thursday said it closed the acquisition of 74.99pc of Pro-Mot Hungaria, a joint holding of Israeli property developers Shikun + Binui and AFI Group which owns a resort on Lake Balaton,for a consideration of EUR 14.2m on January 28. During the summer of 2018, the company signalled that it purchased a majority share of a real estate developer, and via that has access to large lakefront property. This transaction has been finalized and closed lately.
- With the transaction, Appeninn acquired 37 hectares of lakefront property that comprise Club Aliga, a former resort for officials of the Hungarian Socialist Worker's Party, as well the trusteeship for another 10 hectares attached to the resort.
- Regarding the transaction value, it mounts to EUR 14 million according to the statement. Although the financing side is yet to be clear, Appeninn should have had ca. EUR 9 million own sources to fund by the end of 2018 (had EUR 5 million cash on its BS in 2018H1 and further cash flow from operation in H2), leaving the remain part of the transaction financed by debt (ca EUR 6 million). With this additional debt, Appeninn leverage (LTV ratio) should hover around 55% around its guided figure.
Appenin Vagyonkezelo Holding Nyrt (Appeninn Property Management Holding Plc) is a Hungary-based company active in the real estate sector. The Company operates in three segments: renting offices complexes and storages; real estate management; and industrial machinery leasing. The first segment includes seven office complexes and storages in Budapest. The second segment includes technical facility management (overall technical operation, operation and maintenance of building engineering an electricity, planned preventive maintenance and conservation, building surveillance, troubleshooting and renovations, among others) as well as infrastructural facility management (sanitary service and cleaning, reception services, security guarding, gardening, waste treatment and document destruction, among others). The third segment includes mobile telescoping cranes leasing. As of December 31, 2011, the Company operated 13 subsidiaries.
Concorde Securities Ltd. is Hungary’s leading independent company engaged in investment banking activities. It provides its clients with integrated financial services, including securities trading, research, corporate financing advisory, capital market transactions, wealth management and investment advisory. The operational management of the company is the responsibility of the CEO, while the owners/managers (who control one-third of the company through their shares and options) are in charge of its strategic governance. Concorde Securities Ltd. is a member of the Budapest, Frankfurt, Warsaw and Bucharest stock exchanges, as well as of the Hungarian Association of Investment Service Providers.
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