Immofinanz Group has purchased a 29,297 sqm development site in Lublin where a project known as Galeria Zamek is expected to be built. It’s another significant step up the risk ladder for the investor, which had previously expanded the Silesia Shopping Center in Katowice.
“In 2011 Poland again confirmed its standing as an economic driver for both the CEE region and the EU,” said Eduard Zehetner, CEO of Immofinanz Group. “This position is reflected, among others, in the sound growth of the retail sector and the resulting increase in activity by international retail chains.
Immofinanz is currently in discussions with Lublin officials to amend the project’s building permit. Construction should start by spring 2012.
Immofinanz Group has spent €50m on its 20,000 sqm extension to Silesia City Center. Over 90% of the newly developed units are now waiting for new brands to move in. H&M, Van Graaf and SMYK Megastore has already started work on their new stores. Other newcomers to the mall include Calvin Klein Jeans, Tommy Hilfiger, La Mania, Massimo Dutti, Stradivarius, Harpers Shoes and Lacoste. The project is expected to be completed in autumn 2011.
Here’s the shortest press release we’ve ever received:
“Due to our counterclaims we are confident that this lawsuit will not be successful.”
It was issued by Immofinanz, in reaction to an equally remarkable claim by its former CEO Karl Petrikovics, who says the company owes him over €9m in severance pay. Including (seriously) €1.25m in holiday pay.
Immofinanz, you’ll remember, was headed into the financial intensive care unit by the end of Petrikovics’ reign, so this kind of claim could be surprising for some. But it takes place against a background of criminal investigations about the goings on at the company during the time of the former CEO. So it’s probably all a bit more complicated. More detail reported here.
Immofinanz continues down its self-imposed road of getting rid of fund investments and minority interest stakes in properties. The latest step is the sale of nine fund investments worth somewhere between €137m to €140m, depending on exchange rate developments over the next few months. The investments were finance-free, meaning the funds will turn up in the company’s cash box in the same amount as the sale price. The cash will come in handy, seeing as CEO Eduard Zehetner is itching to get his hands on more Polish and Russian assets.
Strange, could have sworn we heard Atrium saying something similar just moments ago. Birds of a feather…
But back to Immofinanz. Which funds are now surplus to requirements?
This transaction by the IMMOFINANZ Group covers the sale of investments in five European (Europa Emerging Europe Fund Ltd., Europa Fund II LP., FF&P Russia Real Estate Ltd., FF&P Development Ltd. and Polonia Property Fund Ltd. II) and four American (Carlyle Halley Co- Investment Inc., Prologis North American Industrial Fund II LP., Gotham City Residential Partners I LP. and Broadway Partners Real Estate Fund II, LP.) property funds.
Immofinanz is to take control of the Romanian developer Adama, where it already holds a 30% stake, for €50m. ZF reports this means it’s driving out the other original shareholders, who aren’t exactly small players: Morgan Stanley, Lehman Brothers and Tiger Global investment funds and founders David Flusberg, Dvir Cohen-Hoshen and Isaac Cohen-Hoshen.
With convertible bonds coming due in 2014 to 2017, Immofinanz has been planning to issue bonds worth €550m in order to finance their redemption. It offered new convertible bonds first to its shareholders, but they’ve only picked up around 3% of them. The remainder are now going out to the open market. It’s thought they’ll have a conversion premium of 30 to 35% and a coupon of between 3.5 and 4.25%. They come due in 2018.
Immofinanz will be selling €550m in convertible bonds to help finance its bonds that come due between 2014 and 2107. If you own shares in the company, you’ll get first crack at the new issuance, whose conversion price could be 30-40 percent above the current share price, and whose coupon could be over 3%. This would allegedly complete the financial restructuring following the company’s descent into distress in 2009. Immofinanz was merged with Immoeast, reams of assets were sold and a totally reshaped management structure was installed. Proof of this could come at the end of 2011, as dividend payments to shareholders are now being hinted at.