German property investment company Develica Deutschland said it has bought back 21,298,000 of its own ordinary shares for a total investment of EUR 2.8mln, pointing to the deep discount at which its stock was trading compared to its net asset value (NAV). Develica noted that it acquired the shares at EUR 0.13 per share compared with the last stated NAV of EUR 0.70 per share reported last month for the year to 31 March 2008. The buyback will enhance Develica’s NAV per share value by more than 7%, the company said.
German property investment company Develica Deutschland said it has bought back 21,298,000 of its own ordinary shares for a total investment of EUR 2.8mln, pointing to the deep discount at which its stock was trading compared to its net asset value (NAV). Develica noted that it acquired the shares at EUR 0.13 per share compared with the last stated NAV of EUR 0.70 per share reported last month for the year to 31 March 2008. The buyback will enhance Develica’s NAV per share value by more than 7%, the company said.
‘While the board is aware of the ongoing pressure on the portfolio’s loan-to-value covenants and continues to monitor the situation closely, it was decided to acquire as many shares as is possible under our current mandate while the price was at such a deep discount to our last reported NAV,’ said Develica chairman Derek Butler. ‘Although we believe that conserving cash is of paramount importance to the company, the opportunity to enhance shareholder value by more than 7% by utilising our extremely strong and positive cash flow was totally justified as being in the best interests of all shareholders. The board also believes that any further purchases under the buy-back programme will continue to enhance NAV per share.
Develica said it remains alert to German commercial property sentiment and global financial uncertainty, reiterating that strategic disposals would continue to be considered.
