Preliminary Results, Amendment to Convertible Securities & Management Agreement and New Investment Focus

EUROCASTLE INVESTMENT LIMITED

        FOR IMMEDIATE RELEASE
Contact:
International Administration Group (Guernsey) Limited
Company Administrator
Attn:  Mark Woodall
Tel:  [phone]

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.

Preliminary Results, Amendment to Convertible Securities & Management Agreement and New Investment Focus

Guernsey. 28 February 2013 - Eurocastle Investment Limited (Euronext Amsterdam: ECT) ("Eurocastle" or the "Company") hereby announces its preliminary results for the 12 months ended 31 December 2012.

Highlights

• The Company expects to report that its NAV has decreased by €55.6 million (€0.18 per share) to €307.3 million or €0.46 per share¹ mainly as a result of share dilution reflecting interest accruing on the convertible debt (€0.10 per share) and a decrease in the fair value of the Company's investment property (€0.10 per share), which has been partially offset by gains realised from senior debt repurchases net of impairment losses within Eurocastle's Debt Investment portfolio. 

• The Company has secured a 12 month extension of the senior loan on the Drive portfolio to January 2014 with interim amortisation targets to be met through an agreed sales programme.  Eurocastle remains in constructive discussions with the lenders of the junior facility which matured in January 2013. 

• As at 31 December 2012, Eurocastle had a corporate cash balance of €38.8 million. 

• The Company proposes to clean up its capital structure by re-striking the conversion price in its outstanding Convertible Securities from €0.30 to €0.05 per share and converting all such outstanding convertible debt into ordinary shares. 

• Conditional on such conversion, the Company has reached agreement to rebase the management fee calculation under its management agreement with FIG LLC, an affiliate of Fortress Investment Group LLC ("Fortress"), which will preserve capital for investment. 

• The Company sees opportunities in moving its investment focus to distressed Italian debt and real estate. 

¹ The NAV disclosed is on a fully diluted basis and excludes the negative NAV of the Mars Floating portfolio as this financing is non-recourse to the Company and not callable as a result of any changes in the value of the assets.

Summarised Balance Sheet	2012 (unaudited) €'000	2011 (audited) €'000
Cash and cash equivalents	141.3	117.7
Real Estate investment property	2,020.3	2,201.8
Debt investments	456.1	494.2
Other assets	31.7	57.1
Total assets	2,649.4	2,870.8
Interest bearing debt financing	(2,251.0)	(2,405.9)
Other liabilities	(106.3)	(102.0)
Total liabilities	(2,357.3)	(2,507.9)
Net assets	292.1	362.9
Net assets €/share	0.44	0.64
Net assets of the Mars Floating Portfolio	(15.2)	5.7
Adjusted net assets2	307.3	362.9
Adjusted net assets €/share	0.46	0.64
Summarised Income Statement	2012