Foncière R-Paris forced to sell mixed-use building for EUR 62m

Spanish group Restaura's French unit Foncière R-Paris said that it has signed a preliminary agreement to sell the 144 Rivoli building in Paris' first arrondissement after a subsidiary owning the asset failed to meet its debt payments.

The company was in negotiations with the lenders to its unit, SCI Rivoli-Roule, but was not able to reach an agreement, which prompted a default of the unit. As a result, Foncière R-Paris decided to dispose of the property for just over EUR 62 mln. The closing of the transaction is conditional upon a number of conditions related to the state of the mortgage, the transfer of the construction permit, and the absence of pre-emption right on the asset.

'Having taken into account the financial difficulties of the SCI Rivoli-Roule, it has appeared, as part of the negotiations conducted with the unit's creditor banks, that any solution would imply the sale in the short term of the property held by the subsidiary,' the company said. It added that 'a new phase of negotiations has begun with the banks to find a solution acceptable to all parties'.

The company bought the complex at Paris' Rivoli 140 and 144 in 2007 for some EUR 47 mln. It planned to restructure the complex to provide around 12,500 m² of retail, office and residential space.