Colonial Plans To Increase Its Share Capital By €265M

26 May 2016 – Expansión

Colonial will undertake a capital increase amounting to €265 million to allow it to continue adding office buildings to its portfolio. In parallel, the Group is preparing to make investments amounting to €400 million, including the purchase of a 4.4% stake in its French subsidiary SFL (Société Fonciere Lyonnaise) and several buildings in Madrid and Barcelona.

The capital increase should be approved at the General Shareholders’ Meeting on 28 June and will serve to finance some of the asset acquisitions by allowing Colonial to make some payments in shares. Following this operation, the Group’s market capitalisation will exceed €2,300 million.

The expansion of its stake in SFL, where it will end up controlling 57.5% of the share capital, will be performed through the acquisition of a share package from the Reig Capital Group. Part of the payment will be realised in cash (€51 million) and the remainder, through the delivery of 90.8 million new shares in the real estate company. The Holding company owned by the Andorran businesswoman María Reig will thereby control 2.5% of Colonial’s share capital.

The share capital will also serve to pay for the purchase of two office buildings in Madrid, currently owned by the Mexican group Finaccess and valued at €202 million. The buildings in question are IBM’s headquarters in Madrid, located on Calle Santa Hortensia and the building located at number 73 on Calle Serrano. The former has a total surface area covering 47,000 sqm and is one of the seven largest office buildings in the capital, whilst the second, with a surface area of 4,200 sqm, has been highly valued due to its location and the quality of its facilities.

In return for integrating these two properties into its portfolio, Colonial will grant Finaccess 288.6 million new shares in the real estate company, which means that the group will control an 8% stake in Colonial.

In parallel to these operations, the real estate group chaired by Juan José Brugera (pictured above, centre) has completed the purchase of another office building in Madrid. It is located on José Abascal, 45 and has a surface area of 5,300 sqm. In this case, the consideration paid was €35 million.

The group has also purchased land in the 22@ district in Barcelona from the British fund Benson Elliott for more than €40 million. Colonial plans to construct a 17-storey office building with a surface area of 24,000 sqm on this land, which has not started to be marketed yet. The total investment of this project is budgeted to amount to €77 million.

The CEO of Colonial, Pere Viñolas, said yesterday that with this operation, the group will incorporate a surface area of 80,000 sqm and will be “20% larger than it is today”. The company expects that its revenues from rental income will also increase by 20% as a result.

Colonial’s indebtedness will increase by €111 million to €1,300 million. The Group’s consolidated debt, including SFL, amounts to €3,000 million and the company’s indebtedness ratio over asset value will amount to 41%.

Its market capitalisation increased by 1.5% yesterday to €0.677 per share.

Original story: Expansión (by Marisa Anglés)

Translation: Carmel Drake

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