Atrium alters equity raising, eyes second listing in Amsterdam

Vienna-listed Atrium European Real Estate has unveiled a new EUR 72 mln equity raising that replaces the EUR 300 mln rights issue signalled when Citi Property Investors and Israel's Gazit-Globe agreed to invest up to EUR 800 mln in the company last year.

The deal in August last year involved CPI and Gazit investing in a EUR 500 mln convertible bond and backing the EUR 300 mln rights issue.

Under the new agreement, Atrium - a developer and manager of shopping centres in Central and Eastern Europe - will issue 10.3 mln new ordinary shares at EUR 7 each. CPI, a unit of Citigroup, will acquire 4.73 million shares and Gazit will take the rest. The operation is to be completed by 31 January. In addition, Gazit will also sell back EUR 103 mln worth of non-convertible bonds it acquired from Atrium last year. The price equals the EUR 77.2 mln Gazit paid, plus interest.

Atrium will seek a listing of its ordinary shares on Euronext Amsterdam by end July this year, in conjunction with a listing of shares in Vienna in substitute for a listing of certificates that represent its shares.

Atrium said there were several related reasons for its decision to revise the previous agreement with CPI and Gazit. The 'significant deterioration' in market conditions had led to a serious decline in Atrium's share price to about EUR 3, and about EUR 1.55 in November last year. This made it unlikely the company's certificate holders would subscribe to the new shares at EUR 7 a piece. As a result CPI and Gazit would be required under the agreement to underwrite the issue, potentially in full.

Such a move would significantly dilute certificate holders' interests in the company and potentially force CPI and Gazit to make a mandatory bid for the entire company. Atrium said the agreement with CPI and Gazit was never intended to have such consequences.