Struggling Italian real estate group Prelios has reached agreement with investment firm Feidos on a capital injection and restructuring of debt.
Struggling Italian real estate group Prelios has reached agreement with investment firm Feidos on a capital injection and restructuring of debt.
Prelios announced that CEO Paolo Massimiliano Bottelli has resigned and that Sergio Iasi has been appointed as a new director.
The Milan-listed real estate company reported a net loss of EUR 171 mln for the third quarter of 2012 compared to a net loss of EUR 153 mln in the same period last year. The company said the slide was partly due to writedowns of more than EUR 100 mln on its real estate and non-performing loan portfolio. Consolidated revenues for the quarter were down at EUR 96 mln, while the volume of assets under management dropped to EUR 11.4 bn from EUR 12.4 bn at end-December 2011 mainly as a result of sales and writedowns.
In a bid to stabilise the company Prelios has signed a memorandum of understanding with Massimo Caputi's Feidos. If backed by Prelios' current shareholders and creditor banks, the agreement will lead to a capital increase of EUR 185 mln. At least EUR 100 mln would be in cash, with the remainder subscribed through a possible conversion of debt.
Current Prelios stakeholders will be able to subscribe to an overall share of EUR 25 mln of the increase, with Feidos signing up for EUR 20 mln. The shareholders are investment company Camfin, insurer Generali, Intesa Sanpaolo bank and oil tycoon Massimo Moratti. They support the recapitalisation plan.
Prelios' debts of EUR 561 mln would be restructured to about EUR 250 mln, with the rest converted into equity or quasi-equity instruments.
Feidos and Prelios have agreed to extend the exclusivity of their talks to 21 December in order to reach a final agreement.
US asset manager Fortress had proposed a rival rescue plan in recent months but Prelios opted to work with Feidos.
