US-based private equity firm Lone Star is taking a large ownership interest through one of its funds in a Central and Eastern European property developer.
US-based private equity firm Lone Star is taking a large ownership interest through one of its funds in a Central and Eastern European property developer.
Lone Star Fund III has signed an agreement to acquire 27.75% of the shares in Warsaw-listed Globe Trade Centers (GTC) from the real estate arm of the Kardan group for €160 mln. The purchase price, which reflects a value of 1.4% above GTC's average share price over the last three months, is to be paid in cash.
Closing of the agreement is expected this week.
Amsterdam-registered Kardan is active in real estate, water infrastructure and financial services in emerging markets. The group announced in October that it was seeking to sell the stake in its GTC subsidiary due to both companies' ‘liquidity needs’ in relation to loan repayment obligations as well as the upcoming repayments of principal and interest of Kardan’s debentures in February 2014 and 2015.
The book value of Kardan’s investment in GTC amounted to €194 mln at end-June.
Kardan CEO Shouky Oren said, 'We finalised a long and complicated competitive process in a challenging market. Selling the stake in GTC is a major step for Kardan in addressing our liquidity situation successfully.'
Kardan founded GTC in the early 1990’s and GTC listed on the Warsaw Stock Exchange in 2004. GTC operates in 10 countries in CEE and owns commercial property valued at over €2.2 bn.
Oren added, 'Taking the decision to sell our stake in GTC is a natural step in the strategy of Kardan, which is to initiate, develop and manage assets and then to exit. Kardan will continue to focus on real estate and water infrastructure activities in promising emerging markets with a markedly higher growth expectation than that of the developed markets.'
Lone Star established its first fund in 1995. Since then the company has organised 12 private equity funds with aggregate capital commitments totalling over $45 bn (€33 bn). Lone Star RE III Fund was formed in October 2013 and has $7 bn in combined capital commitments.
