Prelios boardroom battle erupts as rescue talks begin

Prelios is mulling legal action against a board member for allegedly suggesting the loss-making listed Italian real estate company may not be in a position to continue as a going concern.

The board-level spat could not have come at a worst time for Prelios as the company had just signalled an intention to intensify talks with two potential investors who have offered financial lifelines.

Prelios announced in a statement on Thursday evening that it had mandated a lawyer to 'evaluate any legal action necessary to protect the interest of the company in regards to the conduct of Davide Malacalza'.

Malacalza holds a board-room directorship at Prelios as he is a major shareholder in Camfin Holdings, which holds controlling stakes in tyre-maker Pirelli and Prelios, formerly Pirelli Real Estate.

Prelios said it deplored 'further disclosure' to the media of confidential information and documents. In particular, the statement alleged, that the media was given a letter that Malacalza wrote to the board of directors and board of auditors in which he 'once again highlighted alleged problems due to which the conditions necessary for Prelios to continue as a going concern would be lacking, in the absence of extraordinary transactions'.

Prelios pointed out it had announced earlier on Thursday it intended to continue negotiations on offers by Italian firm Feidos and Fortress Investment Group (UK) to become shareholders.

The decision to continue the talks, Prelios said, confirmed 'the existence of the conditions necessary for the company to continue as a going concern.' The negotiations will include Prelios' main shareholders and creditors.

Prelios had EUR 11.7 bn in assets under management at end-June 2012. The Milan-based listed property services firm saw net loss widen to EUR 126 mln in the first half of 2012 from a EUR 500,000 profit in the same period last year. The huge earnings drop was due to a combination of writedowns on its property and non-performing loan portfolio and restructuring expenses.

According to market rumours, Feidos investment has put EUR 150 mln in cash on the table, while Fortress is believed to be planning a EUR 100 mln capital injection, consisting of EUR 50 mln in cash and another EUR 50 mln in assets. In Italy, Fortress is already active through an asset management unit, Torre sgr, as well as a credit servicing business, Italfondiario.