Risanamento's sale of Falck area hits delay

Italian listed real estate developer Risanamento said that a planned sale of its Falck development site on the outskirts of Milan has been postponed as banks failed to back the deal in time.

The Milan-based company signed a preliminary agreement in June to dispose of the area for EUR 405 mln to a consortium of the Korean group Honua Investment Management, Consorzio Cooperative Costruzioni, Le Copains' Bandiera Group and a group of banks including Intesa Sanpaolo and Unicredit.

The closing of the transaction was conditional on approval by one or more banks for the financing of the site by 30 September 2010. Risanamento said that the condition had not been met, and added that the parties are working to define new terms of the deal.

The transaction price of EUR 405 mln involves around EUR 125 mln of equity and EUR 280 mln of debt. This compares to an estimated value of EUR 450 mln.

Under the agreement, the buyers had to pay 90% of the amount by September, with the balance due after completion of the project, slated for December 2012. Located in the Sesto San Giovanni area, the Falck project was designed by star architect Renzo Piano and will see the development of 1.5 million m² of mixed-use space in Milan.