Eurocastle Investment has said it intends to go to the markets to raise additional capital 'in the near term' to pay down its corporate debt. The Frankfurt and Amsterdam-listed closed-end investment company said it has already received a conditional pledge from an existing shareholder to take up EUR 15.5 mln of any capital raising.
Eurocastle Investment has said it intends to go to the markets to raise additional capital 'in the near term' to pay down its corporate debt. The Frankfurt and Amsterdam-listed closed-end investment company said it has already received a conditional pledge from an existing shareholder to take up EUR 15.5 mln of any capital raising.
Eurocastle revealed it is mulling a capital raising after reporting a post-tax loss of EUR 454 mln in 2008, compared to a net profit after tax of EUR 135 mln in 2007. The firm said the loss was due to a revaluation of its property portfolio. At end-December 2008, Eurocastle's real estate portfolio, which is focused on Germany, comprised EUR 4.2 bn of commercial property investments compared with EUR 4.7 bn at the end of 2007, on a like-for-like basis.
The investment company said it had repaid, extended, or refinanced over EUR 1.3 bn of debt during 2008. Since the end of the year, the group has agreed to extend EUR 236 mln of its short-term loan due in June 2009, and negotiated an extension of its maturing corporate loan of EUR 125 mln to 2011.
The majority of Eurocastle's EUR 5.3 bn in financing at end-2008 was long-term, non-recourse financing at or below market rates. About EUR 539 mln comprises short-term financing exposure. 'In the current environment, almost any short-term, mark-to-market or recourse debt can be a challenge. While they form a modest percentage of our total debt, we have been very focused on repaying or extending out our short-term debt maturities,' the company said.
