PEPR cancels shareholders' meeting

Prologis European Properties (PEPR), the European arm of Denver-based Prologis, has cancelled an Extraordinary General Meeting (EGM) called for 30 September 2009 and has pledged to review alternative capital raising plans with its board following criticism from shareholder APG.

In early September, the real estate arm of Dutch pension giant raised objections to PEPR's continuing access to the revolving portion of a EUR 900 mln senior unsecured credit facility and called on fellow shareholders to support changes to PEPR's articles of incorporation before backing the proposed conversion of its legal structure from a fonds commun de placement (FCP) into a société d'investissement à capital fixe (SICAF).

Days later Prologis said it had completed two financing deals totalling EUR 133 mln on behalf of Prologis European Properties Fund II (PEPF II). Proceeds from the financings were used to pay down PEPF II's warehouse line of credit. The EGM was initially called by PEPR to approve the conversion to a SICAF and to modify and modernise several elements of its corporate governance.

In a press release, PEPR said, however, that while the overwhelming majority of proxies received were in favour of the conversion, it had elected to postpone the EGM in order to 'better understand objections raised by a minority of unitholders through follow up discussions'. PEPR’s management company will now present its board with alternative capital raising plans. These may include the offering of fully underwritten convertible preferred units to
existing unitholders, with an offering size of around EUR 200 mln, potentially in multiple tranches. However, PEPR said it has not ruled out the option of seeking conversion to a SICAF, and subsequently issuing common equity.