Prelios confirms offers from Feidos, Fortress

Prelios has confirmed it has received offers from Massimo Caputi's Feidos investment firm and US asset manager Fortress regarding a potential capital injection and their entry as new shareholders in the loss-making Italian real estate company.

In a statement, Prelios said it is in discussions with the New York-based group as well as with Fimit's former CEO Massimo Caputi for a recapitalisation. The move to strengthen the company's financial structure would also involve the company's lenders.

'All assessments concerning the offers received will be submitted to the Board of Directors, which is to meet in the next few days, most likely on 26 September,' the Milan-based group said.

According to market rumours, Caputi 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.

Lazard is acting as adviser on the process.

The announcement comes as Prelios was unable to pay interest on its debt due to worsening financial market conditions. With a negative financial position of EUR 497 mln, Prelios said it has received backing from the banking industry as well as from shareholder Pirelli & C. Group to extend the terms of payment of the interest instalments and measurement of the covenants to year-end 2012.

In the first half, Prelios saw net loss widens to EUR 126 mln as a result of a combination of writedowns on its property and non-performing loan portfolio and restructuring expenses. The figure compares to a profit of EUR 0.5 mln in the same period a year before. The Milan-based listed property services firm said its net result was affected by writedowns of equity and real estate investments of EUR 52 mln, financial expenses of EUR 25 mln, and restructuring costs of EUR 13 mln.

Revenues from the management platform shrank to EUR 61 mln from EUR 80 mln a year before while the operating result came in negative at EUR 28.5 mln, compared to a profit of EUR 28 mln in 2011. On a more positive note, the operating margins of the management platform - the group's core business - remained in positive territory during the first six months of the year, at EUR 6.2 mln. Prelios currently manages EUR 11.7 bn of assets at end-June 2012.