MANDARINE GROUP : Mandarine Group boosts its shareholders' funds

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In order to underpin its development plan, Mandarine Group, which is listed on Euronext Paris' Marché Libre, recently defined the terms for a capital increase aimed at institutional investors, notably those based in Europe, with the aim of raising at least 15 million euros of equity.

Following the reserved capital increase of 111,399,960 euros carried out on 15 March 2007 (3,713,332 new shares issued, each with a warrant (BSAB) attached, with three warrants (BSAB) entitling the holder to subscribe a new share for 30 euros cash during a limited period of one month), Mandarine Group appointed the Dutch stockbrokers Amsterdams Effectenkantour BV (AEK), a member of Euronext and a specialist in this type of financing, to reclassify the unexercised warrants (BSAB).

To date, AEK has received irrevocable statements of intent from European institutionals relating to 2,219,949 warrants (BSAB), boosting Mandarine Group's shareholders' funds by 22,199,490 euros (247,369,850 dirhams) via the issue of 739,983 new shares, resulting in a capital increase of 7,399,830 euros and an issue premium of 14,799,660 euros.

The initial target of the cash call has therefore been exceeded by around 50%.

The warrants (BSAB) can still be exercised up to 15 April 2007.

Dynamic financial strategy to support Mandarine Group's strong growth

Mandarine Group's financial strategy, developed to underpin the group's strong growth in the real estate sector in Morocco and Switzerland, is based on a four-pronged approach:

Strengthen shareholders' funds by opening up its capital to European investors. This has now been achieved following the success of the capital increase.

Seek to have its listing transferred to Alternext (Euronext Paris) following the call on the market. This task has been entrusted to listing sponsor, Atout Capital, and is in progress.

Arrange a convertible bond issue in Morocco. Subject to conditions, the bonds will be convertible into Mandarine Group shares.

Apply to the Moroccan authorities with a view to obtaining the listing of the Mandarine Group shares on the Casablanca Stock Exchange.

Double listing and planned bond issue worth 350 million dirhams

Noting the strong support offered by the Casablanca Stock Exchange to Mandarine Group's business sectors, and based on the powers vested in it by the 16 January 2007 shareholders' meeting, the Board of Directors decided at its meeting of 2 April 2007 to take the necessary steps to arrange:

  • a double listing in Paris and Casablanca; and
  • a bond issue worth 350 million dirhams (around 31.42 million euros) reserved first and foremost for Moroccan institutional investors.

This convertible bond issue, subject to the necessary authorisations, would have the following features:

  • Amount of the loan: 350 million dirhams (around 31.42 million euros)
  • Issue of around 785,500 convertible bonds at a price of MAD4451 (EUR40)
  • Maturity : 5 years
  • Nominal yield  : 6%
  • Minimum subscription amount: 100,000 euros (1,114,000 dirhams)

If the Mandarine Group shares are listed on the Casablanca Stock Exchange, the bonds will become convertible at any time into shares tradeable in either Morocco or France, depending on the nationality of the holder.

  • Conversion ratio : 1 for 1
  • Non-conversion premium : 1%
  • Actuarial yield : 6.165%

If the Mandarine Group shares are not listed on the Casablanca Stock Exchange before the maturity date of the convertible bond, Mandarine Group will repay the loan together with the non-conversion premium, i.e. around MAD450 (EUR40.4).

All the funds in dirhams generated by the bond will be used exclusively to finance the Moroccan activities. For this transaction, Mandarine Group will enlist the help of a leading Moroccan bank associated with Atout Capital in Paris (info@atoutcapital.com).

Omar Essakalli, CEO of Mandarine Group, made the following comments: "Seeking a listing for a French group in Casablanca, after a major capital increase in Europe and a transfer to Euronext Paris' Alternext, is for me a fascinating challenge, in keeping with the ambitions of our group. There is no doubt that this step will represent an active contribution to the development of the sector in Morocco. I also hope, with this move, to play a part in the growth of the Casablanca Stock Exchange by introducing new financial techniques that are already applied to small and mid caps in Europe."

Mandarine Group's business

Mandarine Group has decided to initially develop its business in Morocco and Switzerland. This strategy should ensure it achieves durable growth on the basis of two complementary markets: Morocco, which is strongly growing, and Switzerland:

  • In Morocco, the group has undertaken to build up a property development business. Several projects, representing expected sales of more than 4 billion dirhams (363 million euros) over the coming four years, are currently being undertaken. These will involve the building of 1,664 apartments and villas, an 18-hole golf course, three luxury hotels with a total of 260 rooms, a wellness and fitness centre, 3,000m² of offices and 1,400m² of shops. Other projects of a similar nature are currently being elaborated.
  • In Switzerland, Mandarine Group's objective is to develop a real estate company that can smooth out its overall financial performance while offering a minimum yield to investors. To this end, it has been decided to acquire assets in residential and commercial property and in the hotel sector. As soon as the necessary authorisations have been obtained, the group will communicate details of acquisitions agreed and in progress.

The group does not rule out entering other European markets in the future.

Jean Marie Santander, Mandarine Group Chairman, made the following comments: "I am particularly proud to see that our strategic vision is shared by European institutional investors, confirming our determination to make Mandarine Group an impressive value-creating vehicle while providing a degree of durability for the business by owning real estate assets in Switzerland. I am confident in the management team's ability to meet the challenges we have set ourselves and to successfully conclude the many projects in progress, both in Morocco and in Europe. This is the start of a great adventure. I take this opportunity to thank all the investors who have put their trust in us."


About Mandarine Group

The group is simultaneously developing real estate and hotel activities initially in the Moroccan market via a property development business and in European markets via a portfolio of real estate assets offering a durable yield. The management team controls all the stages of this business plan: design, implementation, marketing, real estate management and operation of hotels and wellness centres.

Listed on Euronext Paris' Marché Libre, Mandarine Group aims to offer its shareholders a high-performance investment vehicle, which will benefit both from the strong growth of the emerging-market real estate and tourism sectors and from the stability of the European market.


For further information, contact:

Omar ESSAKALLI
Chief Executive Officer
Tel: + 212 22 36 30 36
Tel: + 33 1 42 25 52 42
oessakalli@mandarinegroup.com

MANDARINE GROUP SA
Société anonyme (limited-liability company) governed by a Board of Directors with capital of 37,383,320 euros
Head office: 10 rue Lord Byron  75008  Paris
RCS Paris 722,780,277

Mandarine Group is listed on Euronext Paris' Marché Libre. ISIN code: FR0010439513
Ticker: MLDAR , Warrants: DARBS

1EUR1 = MAD11.14 (at 2 April 2007) - MAD =  Moroccan dirhams

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