FPF plans EUR 100m bond issue to finance SNI deal

French SIIC Foncière Paris France (FPF) said that it is planning to issue EUR 100 mln in bonds in a bid to finance the acquisition of the commercial property arm of Société Nationale Immobilière (SNI), a unit of Caisse des dépôts et consignations.

The company is holding a special shareholders' meeting on 24 November to approve the issue of the bonds, which will be redeemable in shares and directly placed with institutional investors.

The company announced in August that it had signed a preliminary agreement to acquire the commercial property arm of SNI in its first acquisition of 2010. The business unit being sold controls a 47,000 m² portfolio of six office buildings in Paris which are valued at EUR 160 mln and include debt of EUR 88 mln. As part of the acquisition, FPF will also receive a real estate management agreement with the City of Paris to manage around 20 office and retail assets in the French capital.

The SNI subsidiary employs a staff of 17 in charge of asset and property management and is being divested as part of SNI's strategy to focus on its core business of social housing and residential properties. The agreement calls for SNI to transfer the business to a company created for this purpose, which will then be acquired by Foncière Paris France before the end of the year.

'In 2011, Foncière Paris France intends to pursue its acquisitions programme, with the confirmed mediumterm objective of building a portfolio of some one hundred properties with a total value of around EUR 1 bn,' the French SIIC said in a statement.

The company currently holds a portfolio of 240,000 m² consisting of 43 commercial properties in Paris with a value of EUR 382 mln at present.