Spain's Inmobiliaria Colonial will seek to raise EUR 1.95 bn of fresh capital as part of a long-awaited refinancing deal closed last week with creditors. In a statement on Friday to the stock market regulator, the troubled real estate company said it has reached a final and binding agreement with the banks to restructure EUR 4.96 bn of debt.
Spain's Inmobiliaria Colonial will seek to raise EUR 1.95 bn of fresh capital as part of a long-awaited refinancing deal closed last week with creditors. In a statement on Friday to the stock market regulator, the troubled real estate company said it has reached a final and binding agreement with the banks to restructure EUR 4.96 bn of debt.
Under the terms of the deal, Colonial will issue 16 bn new shares worth EUR 0.12 each. The company will use EUR 50 mln of the new funds to cover its own operating expenses, with the remainder destined to reduce the EUR 4.25 bn syndicated loan. If the company is not able to raise the EUR 1.95 bn in full, it has agreed to hold a second share issue to cover the difference. These shares would be swapped for debt with the creditor banks including Eurohypo, Calyon, RBS, Orion and Colony Capital.
The company said that the majority of the debt (up to EUR 2 bn) will be guaranteed by the company's rental generating portfolio and Colonial's stake in its French unit, Societe Fonciere Lyonnaise (SFL). The new loan is due for repayment by end-December 2014.
Additionally, the company's development and land portfolio will be transferred to a new unit which will be fully controlled by Colonial. This subsidiary will take over the rest of the restructured debt (up to EUR 1 bn), which will have a five-year term and will be guaranteed by the company shares, the assets and Colonial's stake in its shopping centre unit Riofisa.
The company said it is also considering the issue of warrants convertible into EUR 298 mln worth of shares. All the operations are due to be executed by July 2010.
'The company believes that the renewed financial stability provided by this agreement, together with the resulting strengthening of the company's capital will ensure the normalisation of the company's operating business in the near future in a new phase of business development,' it said.
Colonial was advised by Lazard on the operation.