Dragon Ukrainian Properties is calling an extraordinary general meeting on 17 February 2014 to put a set of proposals to shareholders.
First it plans to make no new property investments, to sell “as quickly and effectively as the Ukrainian property market will allow” the existing portfolio and return the proceeds to shareholders.
DUPD also hopes to change the management fee from 1.5% of gross assets per annum to $1,25m for the second half of 2013 (the deal will be back dated), $2.5m for 2014, $2.1m for 2015, $1.7m for 2016, $1.5m for 2017 and $1.4m for 2018 PLUS a performance fee calculated as 3.5% of the first $50m of distributions, 7% of the next $75m and 10% of the remainder. In addition to this DUPD hopes to introduce an incentive fee for its non-executive directors calculated as 0.15% of all distributions for the Chairman and 0.1% for the other non-executive directors (this is on top of their normal fees of $100,000 for the Chairman and $50,000 each for the other non-exec.s).
To facilitate the planned distributions to shareholders, the company plans to re-register as a 2006 Act company in the Isle of Man
Dragon Ukrainian Properties was launched in 2006 and raised more money in 2007 close to the top of the credit bubble. Its net asset value was impacted by the adverse conditions of 2008/9. It has made some recovery since but the net asset value remains below the initial fund raising price and well below the price the second fund raising was conducted at. Although the investment focus of the fund has shifted more to income producing property, DUPD still has a number of projects in development and these may take some time to sell (DUPD may continue to back these projects).