23 April 2024 15:22
Price Sensitive

IGD closes the sale of a real estate portfolio with Sixth Street and Starwood Capital

The net cash in from the transaction will be used to reduce the Group's debt

IGD SIIQ S.p.A (“IGD”) announces that today the definitive contract, in execution of the preliminary agreement disclosed to the market on 23 February 2024, was signed with Sixth Street and controlled affiliates of Starwood Capital and Prelios SGR S.p.A.

The transaction involves the sale, by IGD, of a real estate portfolio for €258 million, consistent with the appraised value as at  31 December 2023.

The portfolio comprises 8 hypermarkets (located in Chioggia, Porto d’Ascoli, Roma, Rimini, Conegliano, Ascoli Piceno and 2 in Bologna), 3 supermarkets (located in Civita Castellana, Ravenna and Rome) and 2 shopping malls (located in Bologna and Chioggia).

The transaction was carried out through a closed-end real estate investment fund (an Italian REIF) called “Food Fund” established and managed by Prelios SGR, the asset manager of Prelios Group, into which IGD contributed the properties. Subsequent to the contribution, 60% of the fund units (class A shares with preferred returns) were sold by IGD to a Luxembourg vehicle (held 50% by Sixth Street and 50% by Starwood Capital) with a value of €155 million, while IGD maintained ownership of the remaining 40% (class B shares with subordinated returns).

 

“We are very satisfied to have completed this transaction so quickly, consistent with the 2022-2024 Business Plan, as it was particularly important to us and aimed at reducing the Group’s financial leverage”, Roberto Zoia, IGD’s Chief Executive Officer commented. “Thanks to the financial resources raised we will be able to repay, among other things, almost one third of the bond issued last 17 November, which significantly impacts our cash flow generation.  The success of this transaction confirms, therefore, our commitment to accelerating repayment of the most onerous financial instruments, dedicating the utmost attention to further improvement in our core business and creating value for all our stakeholders”.

 

The proceeds of the transaction shall be used by IGD in order to:

  • partially redeem the “€310,006,000 Fixed Rate Step-up Notes due 17 May 2027” issued on 17 November 2023, for an amount equal to €90 million, reducing the outstanding nominal value from € 310 million to €220 million;
  • make a partial early repayment of the €250 million green secured loan signed in May 2023, for an amount equal to the ALA (allocated loan amount) of each mortgage property included in the sale perimeter and, therefore, for maximum amount equal to €62.5 million;
  • make a partial early repayment of the €215 million green unsecured loan signed in August 2022 of €0.71 million.

As a result of the transaction, the Loan to Value 2023 (pro-forma) is estimated to be around 44.4%, approximately 3.7 percentage points lower than the 48.1% recorded at the end of the year. It is also estimated that financial charges will decrease by around €5.3 million in the current year (annualized this positive impact reaches more than €11 million).

IGD also signed a contract with Prelios SGR to continue to manage the project, property & facility management activities across the entire portfolio with a view to further enhancing the portfolio over the next few years and selling it on the market at the best conditions possible.  IGD will also see benefit for approximately €2 million annualized from higher project, property & facility management revenue and lower operating costs.