Gecina suspends Metrovacesa separation plan

French property company Gecina said on Friday it is suspending a plan agreed last year to separate from its major shareholder Metrovacesa. The French SIIC said the decision was promted by significant changes in the shareholding structure of the Spanish group, which owns a 27% stake in Gecina. Debt-laden Metrovacesa announced last week that its creditor banks were taking control of around 65% of the firm.

'Gecina has taken note of the agreement between the Sanahuja family, Metrovacesa's majority shareholder, and some of its creditor banks. Pending the signing of this agreement between the Sanahuja family and these banks, and an analysis of its consequences, Gecina is suspending the implementation of the separation agreement,' it said on Friday.

Additionally, Gecina announced it is to distribute an interim dividend of EUR 2.50 per share for 2008, to be paid out on January 30, 2009. The interim dividend will be followed by a final pay-out, the amount of which will be determined after the close of accounts for the first half of the year.

Gecina said its financial position is sound, with a loan-to-value (LTV) ratio of under 40%, lower than the European industry average. The company expects the cash position and available credit lines will amount to EUR 500 mln at end-December. The group's bank debt maturities in 2009 are limited to EUR 150 mln, it added, equivalent to just 3% of net debt.

The firm has been reducing its debt over the second half of the year, primarily thanks to asset disposals. These should represent over EUR 600 mln in 2008, mostly recorded in the fourth quarter. Looking forward, the company is forecasting cash flow before sales and after tax will grow by more than 10%, chiefly due to a reduction in finance costs and operating expenses and a favourable like-for-like performance from rental revenues. The firm is targeting EUR 600-700 mln of asset disposals in 2009.