Rights Offer Declaration Announcement

Introduction

It is the intention of NEPI to undertake a rights offer to all NEPI shareholders in order to raise approximately €50 million (“the rights offer”).
The proceeds from the rights offer are expected to be used to fund potential acquisitions which NEPI is in the process of negotiating. Should the acquisitions not be completed, the proceeds from the rights offer will be used to repay existing borrowings.

Salient terms of the rights offer

NEPI shareholders will be offered a total of 12 345 680 new NEPI shares (“new NEPI shares” or “rights offer shares”) in the ratio of 9.37648 new NEPI shares for every 100 ordinary shares held by them on Friday, 26 October 2012 for shareholders on either the South African share register or the UK share register, or on Monday, 22 October 2012 for shareholders registered in Romania.
The subscription price for rights offer shares is €4.05 per rights offer share for shareholders on the UK share register and for shareholders registered in Romania and R43.50 per rights offer share for shareholders on the SA share register, calculated using a EUR:ZAR exchange rate of €1.00:R10.74.
The letters of allocation, which are issued to shareholders on the South African share register, are negotiable and can be traded on the JSE under JSE code: NEPN and ISIN: IM00B8G37960.
Subject to receiving the necessary approvals from the BVB and Romanian National Securities Commission, it is intended that the pre-emptive rights, which are issued to shareholders registered in Romania, are negotiable and can be traded on the BVB by shareholders registered in Romania under BVB code: NEPR02 and ISIN: IM00B8FJ9339.
Shareholders are advised that neither the letters of allocation issued to shareholders on the SA share register nor the pre-emptive rights issued to shareholders registered in Romania are fungible and accordingly are not capable of being transferred between the JSE and the BVB.

Excess shares

Shareholders on the South African share register, shareholders on the UK share register and shareholders registered in Romania will have the right to apply for any excess rights offer shares not taken up by other shareholders and any such excess shares will be attributed equitably taking cognisance of the number of shares and rights held by the shareholder prior to such allocation, including those taken up as a result of the rights offer, and the number of excess rights applied for by such shareholder.

Foreign shareholders on the South African share register

Foreign shareholders on the South African share register may be affected by the rights offer, having regard to prevailing laws in their relevant jurisdictions. Such foreign shareholders should inform themselves about and observe any applicable legal requirements of such jurisdiction in relation to all aspects of the rights offer that may affect them and should refer to the rights offer circular for details of the rights offer and the laws and regulations governing the rights offer. Any foreign shareholder who is in doubt as to his position with respect to the rights offer in any jurisdiction should consult an appropriate independent professional adviser in the relevant jurisdiction without delay.

Important dates and times for shareholders on the SA share register

Notes

1. All times indicated in this timetable are South African times.
2. Dematerialised shareholders are required to inform their CSDP or broker of their instructions in terms of the rights offer in the manner and time stipulated in the agreement governing the relationship between the shareholder and its CSDP or broker.
3. Share certificates may not be dematerialised or rematerialised between Monday, 22 October 2012 and Friday, 26 October 2012, both days inclusive.
4. Transfers between the SA share register, the UK share register and the Romanian Central Depository may not take place between Monday, 22 October 2012 and Friday, 26 October 2012, both days inclusive.
5. Dematerialised shareholders will have their accounts at their CSDP or broker automatically credited with their rights and certificated shareholders will have their rights credited to a nominee account at Computershare Investor Services (Proprietary) Limited.
6. CSDPs effect payment in respect of dematerialised shareholders on a delivery-versus-payment method.
7. The rights offer shares will be issued on the SA, UK and Romanian share registers on the same date, being Tuesday, 20 November 2012.

Important dates and times for shareholders on the UK share register

Each of the times and dates in the table below is indicative only and may be subject to change.

Notes

1. References to times in this timetable are to London time unless otherwise stated.
2. Share certificates may not be dematerialised or rematerialised between Monday, 22 October 2012 and Friday, 26 October 2012, both days inclusive.
3. Transfers between the SA share register, the UK share register and the Romanian Central Depository may not take place between Monday, 22 October 2012 and Friday, 26 October 2012, both days inclusive.
4. The rights offer shares will be issued on the SA, UK and Romanian share registers on the same date being Tuesday, 20 November 2012.

Important dates and times for shareholders/pre-emptive rights holders registered in Romania

Subject to receiving approval from the BVB and the Romanian National Securities Commission, the timetable for the rights offer will be as follows:

Note

1. References to times in this timetable are to Romanian time unless otherwise stated.
2. Transfers between the SA share register, the UK share register and the Romanian Central Depository may not take place between Monday, 22 October 2012 and Friday, 26 October 2012, both days inclusive.
3. The rights offer shares will be issued on the SA, UK and Romanian share registers on the same date being Tuesday, 20 November 2012.

Dealings in nil paid rights and fully paid rights on AIM

No application has been or will be made for the admission of new NEPI shares (nil paid) to trading on AIM and accordingly there will be no dealings on AIM in any nil paid rights to new NEPI shares.
Fully paid provisional allotment letters will not be sent to qualifying shareholders who take up their entitlements to new NEPI shares. Accordingly, there will be no dealings on AIM in fully paid rights represented by provisional allotment letters and the same will not be negotiable (fully paid) on AIM.
After Tuesday, 20 November 2012, the new NEPI shares will be in registered form and transferable in the usual way.

Financial effects of the rights offer

The table below sets out the unaudited pro forma financial effects of the rights offer based on NEPI’s unaudited interim consolidated statement of comprehensive income for the six months ended 30 June 2012 and NEPI’s unaudited interim consolidated statement of financial position as at 30 June 2012. These financial effects are the responsibility of the directors of NEPI and they have been prepared for illustrative purposes only, in order to provide information about the financial results and the financial position of NEPI assuming that the rights offer had been implemented on 1 January 2012 and 30 June 2012, respectively.
The unaudited pro forma consolidated statement of comprehensive income for the six months ended 30 June 2012 and the unaudited pro forma consolidated statement of financial position as at 30 June 2012 of the NEPI group and the explanatory notes thereto will be provided in the rights offer circular.
Due to its nature, the unaudited pro forma financial information (collectively, the unaudited pro forma financial effects, the unaudited pro forma consolidated statement of comprehensive income and the unaudited pro forma consolidated statement of financial position) may not give a fair reflection of NEPI’s financial position, changes in equity, results of operations and cash flows subsequent to the rights offer. The unaudited pro forma financial information has been reported on by the independent reporting accountants and their report will be included in the rights offer circular.
The unaudited pro forma financial information has been prepared in accordance with the accounting policies of the NEPI group that were used in the preparation of the unaudited interim results for the six months ended 30 June 2012.

Notes and assumptions

1. The figures set out in the “Before the rights offer” column above have been extracted from the unaudited interim consolidated statement of comprehensive income for the six months ended 30 June 2012 and the unaudited interim consolidated statement of financial position as at 30 June 2012.
2. The rights offer is assumed to have been implemented on 1 January 2012 for basic weighted average earnings, diluted weighted average earnings, distributable earnings, headline earnings and diluted headline earnings per share purposes and on 30 June 2012 for net asset value, adjusted net asset value and net tangible asset value per share purposes.
3. 12 345 680 rights offer shares are assumed to be issued pursuant to the rights offer, thereby raising capital of €50 million.
4. Although the proceeds of the rights offer are intended to be used to finance yield enhancing investment opportunities in direct property in Romania, there are no firm commitments at the date of this announcement to deploy the proceeds which will be received from the rights offer. Accordingly, there is no factually supportable financial information regarding potential investments. Consequently, it has been assumed that the net proceeds of the rights offer (after payment of estimated costs of approximately €0.16 million) have been utilised to partially repay interest-bearing borrowings of approximately €49.84 million.
5. Finance expense is assumed to be reduced as a result of the repayment of approximately €49.84 million of interest-bearing borrowings at the beginning of the six months ended 30 June 2012. A cost of debt of 4.02%, being the interest rate on the loans which are assumed to be repaid, is assumed to apply throughout the six months ended 30 June 2012.
6. Estimated costs related to the rights offer of approximately €0.16 million have been written off against share premium.
7. A EUR:ZAR exchange rate of €1.00:R10.74 is assumed to apply.
8. All statement of comprehensive income adjustments have a continuing effect.

Circular

Further details of the rights offer will be set out in the circular to NEPI shareholders (“the rights offer circular”) which is expected to be dispatched on Monday, 29 October 2012 and will be made available on the company’s website www.nepi.uk.com as from Monday, 29 October 2012 and on the BVB’s website (www.bvb.ro) from Monday, 29 October 2012.