Spain's Inmobiliaria Colonial has announced plans to focus on its rental income portfolio after completing its debt restructuring process later this year. The Madrid-listed company, which reached an agreement to restructure EUR 4.9 bn of debt in February, said it intends to proceed with its plan to hive off its development and land portfolio into a new subsidiary as part of its new strategy of concentrating on income-generating properties across Europe's major markets.
Spain's Inmobiliaria Colonial has announced plans to focus on its rental income portfolio after completing its debt restructuring process later this year. The Madrid-listed company, which reached an agreement to restructure EUR 4.9 bn of debt in February, said it intends to proceed with its plan to hive off its development and land portfolio into a new subsidiary as part of its new strategy of concentrating on income-generating properties across Europe's major markets.
Colonial, whose rental portfolio shed 8% and 9% of its value respectively in 2008 and 2009, expects values to remain stable in the country over 2010. Colonial's Chief Executive Juan José Brugera said the company is interested in widening its focus to other European countries, particularly Germany. The company is currently active in France and Spain with a portfolio of 52 properties worth some EUR 5.1 bn.
The company's shareholders are due to vote on a resolution next month to carry out a EUR 2 bn capital increase through the issue of 5.6 billion of new shares at a price of EUR 0.12 each. After completion of the restructuring, the company will be 90%-owned by major institutions including RBS, Eurohypo, Calyon, Colony and Orion. Its debt will be reduced to EUR 2 bn from EUR 6 bn at present.
As part of the operation, the company will transfer its land and residential portfolio as well as its shopping centre unit Riofisa to a new subsidiary, Colren, which will also take over debt of EUR 1.3 bn. The agreement envisages an initial five-year period during which Colonial will continue to operate the unit after which the creditor banks could take over the assets if Colonial is not able to meet debt payments.