Preliminary Results, Amendment to Convertible Securities & Management Agreement and New Investment Focus - Seite 2

(unaudited)
€'000 2011
(audited)
€'000 Rental and service charge income 167.7 121.1 Interest income 23.9 25.2 Net impact of sale of Mars Fixed 6.8 (9.4) Decrease in fair value of investment properties (94.7) (28.8) Other than temporary impairment on securities (16.7) (41.0) Interest expense (87.2) (80.8) Service charges and property operating expenses (57.0) (41.2) Other operating income / (expenses) (14.8) (16.1) Net (loss) / profit before taxation (71.9) (71.0) Taxation (9.7) (1.1) Net (loss) / profit after taxation (81.7) (72.1)

² Excludes the negative net assets of the Mars Floating portfolio.

The Company expects to publish its audited financial statements for the year ended 31 December 2012 in the second half of March 2013.

Amendments to Convertible Securities and Management Agreement

Eurocastle also announces that it has today posted to the holders of its €75,000,000 20 per cent. perpetual subordinated convertible securities (the "Series A Convertible Securities") and the holders of its €24,750,000 20 per cent. perpetual subordinated convertible securities (together with the Series A Convertible Securities, the "Convertible Securities") a notice seeking their consent to certain amendments to the conditions of the Convertible Securities. The amendments, if approved by the requisite majority of securityholders, would authorise Eurocastle to mandatorily convert all but not some of the outstanding Convertible Securities (total expected balance as at 28 February 2013 of €166.5 million) on or prior to 31 May 2013 at a Conversion Price of €0.05 per ordinary share, resulting in the issue of new ordinary shares representing in excess of 96% of the resultant aggregate number of ordinary shares in issue. The Conversion Price of €0.05 is equal to the 90 day trailing average price of the Company's ordinary shares as quoted on Euronext.

If the securityholders approve the amendment to the conditions of the Convertible Securities, Eurocastle currently expects to exercise the mandatory conversion right promptly following the effective date of the amendment.

Eurocastle and Fortress, its investment manager, have agreed to make certain amendments to the management and advisory agreement pursuant to which Fortress manages Eurocastle's assets, with the effectiveness of such amendments being conditional upon the conversion of all of the outstanding Convertible Securities. The agreed amendments would (i) reduce the amount payable by Eurocastle to Fortress as annual management fee by resetting the capital base upon which such fee is calculated from an amount equal to aggregate equity proceeds raised to €300 million plus an amount equal to the proceeds of any future issue of equity share capital; and (ii) similarly reset the capital base upon which Fortress's entitlement to incentive compensation is calculated.