Warimpex to raise EUR 54m in capital markets

Austrian real estate developer and investor Warimpex has announced the launch of a EUR 54 mln capital increase as it seeks to take advantage of a recovery in the financial markets. The Vienna-listed group said that it will issue around 14.4 million new shares, representing 36.4% of the company capital, in a combined rights offering and share offering ending on May 10, 2010. The company has set the price of the offer at a maximum of EUR 2.80 per share. The new shares will be offered in the rights offering to existing shareholders at a ratio of four new shares for every 11 existing shares.

As part of the transaction, Ringturm Kapitalanlagegesellschaft (Ringturm), the fund management arm of Erste Bank group and Vienna Insurance Group (VIG), has entered into an agreement with Warimpex to acquire 7.2 million new shares of Warimpex at a price of EUR 1.98 per share, representing a discount of 12.5% on the closing price of the Warimpex shares on April 23. VIG is a long term partner of Warimpex in various projects in CEE.

Warimpex intends to use around 50% of the net proceeds from the offering to finance existing projects such as the development of the Airportcity St. Petersburg development project (Crowne Plaza Hotel and office complex), Le Palais office building in Warsaw as well as the joint venture with Starwood Capital and Louvre Hotels to develop budget hotels in Central and Eastern Europe. The remaining 50% of the net proceeds will be used for the refinancing of existing short-term loans and the payment of outstanding liabilities.

'With this step we are taking advantage of the currently positive sentiment on financial markets and the slight upturn since the second half of 2009 in the early cyclical hotel industry,' said Warimpex CEO Franz Jurkowitsch. 'Our main objective is to ensure flexibility and prompt reaction to market developments'.

Wood & Company Financial Services is the lead manager of the operation, Raiffeisen Centrobank acts as the co-lead manager.

Warimpex is a real estate development and investment company with headquarters in Vienna and offices in Budapest, Prague, St. Petersburg and Warsaw. Warimpex currently owns or co-owns 21 business and luxury hotels with more than 5,000 rooms as well as five commercial and office buildings with 32,000 m² mainly in Central and Eastern Europe.