Ablon Group Limited : Transfer of loans and associated arrangements

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION

For Immediate Release                                                                       22 March 2013

Ablon Group Limited

("Ablon" or the "Company")

Transfer of certain loans and associated arrangements

The board of Ablon ("Board") have been informed that on 21 March 2013 a number of expired loans, held within the Ablon group ("Group") with a total capital amount of €29,421,222 and interest ("Expired Loan Portfolio"), have been transferred from Volksbank AG ("Volksbank") to CPI Beta a.s. ("CPIB"), a subsidiary of CPI Group a.s ("Transfer").  Whilst completion of the Transfer was a matter between Volksbank and CPIB, the Group had previously consented to the transfer.

The Expired Loan Portfolio consists of eight expired loans on the following projects:

·      Hightech Park, Hold, Katona, Nap projects in Hungary;

·      Kolben, May House and Ritka project in the Czech Republic; and

·      Mogosaia project in Romania.

Had the Company been requested to pay back these loans (assuming it was unable to raise sufficient sales proceeds from the sale of the properties provided as security for these loans), the subsidiary companies holding the loan to be repaid would have been in default.

CPIB, as new holders of the Expired Loan Portfolio, have agreed various provisions with the Company including the extension of the expired loans until 11 September 2014, keeping the interest at the same interest level as that of the expired loans, capitalisation of the interest accrued during the extension period and the interest and penalty interest currently unpaid and waiving the penalty interest accrued on some of the loans.

In addition, as part of the agreement entered into between Volksbank and CPIB, Volksbank have agreed to alter the terms of some of the remaining loans in place between Volksbank and the Company on the request of the subsidiary company holding the loan ("Loan Agreement"), including:

·      a one-time waiver of €1,250,000 in connection with the loan of Buyway Soroksár;

·      an increase of €5,500,000 on a loan granted to Global Immo Kft with an interest on the increase of the loan at 2% above the 3 month Euribor. Out of the loan increase  €1,882,850 shall be used to repay two long term loans in full on the Fogarasi and Hightech Park yielding  projects; and

·      an extension of 30 months to a loan granted to Airport City Ingatlanbefektetesi Kft that would otherwise expire on 30 April 2013.

CPIB has paid Volksbank 50 per cent. of the nominal value of the Expired Loan Portfolio plus 50 per cent. of the total interest accrued as consideration for the Transfer of the full loan and interest amount. In addition, CPIB is providing a corporate guarantee to Volksbank in respect of the repayment of the principal and interest of the Fogarasi, Buyway Dunakeszi and Buyway Soroksár loans currently provided by Volksbank to the Company.

The Transfer and the Loan Agreement (together the "Transaction"), and in particular the Transfer, was substantively negotiated and agreed between CPIB and Volksbank with little involvement of the Board. The Board were then asked by Volksbank to consent to the Transfer, as detailed above.The Independent Directors (being all Directors other than Wolfhard Fromwald who was appointed to the Board pursuant to a shareholder meeting requisitioned by VB Real Estate Holding eins GmbH, a company within the same group as Volksbank in December 2012), as so advised by Beaumont Cornish Limited, have concluded that their consent to the Transfer is in the best interests of the Company and its shareholders as a whole. However, the Independent Directors, as so advised by Beaumont Cornish Limited, are not in a position to opine on whether the terms of the Transaction are fair and reasonable in so far as Independent Shareholders (being all shareholders of Ablon save for Volksbank and CPI) are concerned. In coming to this decision the Independent Directors have taken into account a number of factors which will be detailed in the response document, to the unconditional mandatory cash offer made by CPI for the entire issued and to be issued share capital of Ablon not already owned by CPI, which is due to be posted to shareholders by no later than 27 March 2013.

As the Board has not been afforded the opportunity of being involved in the substantive negotiations of the Transaction, and in particular, has not been party to the arrangements by which CPIB has received the loans and accrued interest at a 50 per cent. discount to face value, the Board  is unable to form a view as to whether the terms of the Transaction as a whole are fair and reasonable as regards shareholders as a whole in accordance with its stated intention voluntarily to adopt Rule 13 of the AIM Rules.

Alex Borrelli, Chairman of Ablon commented;

"We are pleased that terms for the prolongation of these expired loans have now been agreed as this concludes a period of uncertainty over the short term financial stability of the Company."

Each member of the Board accepts responsibility for the information contained in this announcement and, to the best of each member of the Board's knowledge and belief (having taken all reasonable care to ensure that such is the case), the information contained in this announcement is in accordance with the facts and does not omit anything likely to affect the import of such information.

Enquiries:
Alex Borrelli / Adrienn Lovro

Ablon Group Limited

+44 7747 020 600/+36 1 225 6600

Roland Cornish/Emily Staples

Beaumont Cornish Limited

+44 207 628 3396

Beaumont Cornish Limited ("Beaumont Cornish") which is authorised and regulated in the United Kingdom by The Financial Services Authority is acting for the Company in relation to the matters described in this announcement and is not advising any other person, and accordingly will not be responsible to anyone other than the Company for providing the protections afforded to customers of Beaumont Cornish or for providing advice in relation to the matters described in this announcement.

A copy of this announcement will be made available (subject to certain restrictions relating to persons resident in restricted jurisdictions) at http://www.ablon-group.com by no later than 12 noon (London time) on 23 March 2013, being the business date following the date of this announcement.

About ABLON Group Limited

Founded in 1993 in Budapest (Hungary), ABLON and its subsidiaries (together the "ABLON Group") has properties at 33 locations, of which there are 15 completed projects and 23 development projects in Budapest, Prague, Bucharest and Warsaw. Its portfolio comprises a diversified mix of office, residential, retail, logistics and hotel developments valued at €385 million as at 30 June 2012. The ABLON Group had, as at 30 June 2012, 202,000 square metres of existing and income generating office, residential, hotel, retail and logistics assets (at 15 locations) in Budapest and Prague, with a significant development land bank comprising a further 1,159,600 square metres (at 23 locations) in Budapest, Prague, Bucharest and Warsaw. ABLON's shares are traded on the Main Market of the London Stock Exchange under the ticker 'ABL'.