Testa To Approve Receipt Of Homes Worth €665M From Its Shareholder Banks

30 January 2017 – Expansión

The Socimi Testa Residencial, which is owned by Merlin and the shareholder banks of the former Metrovacesa, is holding an Extraordinary Shareholders’ Meeting today to approve the contribution of new homes to its portfolio by Santander, BBVA and Banco Popular. The homes have a combined value of €665.5 million.

Specifically, the operation will be structured as a capital increase through non-monetary contributions, with a nominal value of €52.6 million and an overall value (nominal value plus issue premium) of €665.5 million.

The operation, which was announced on 15 September 2016 by the President of the Socimi Merlin Properties, Ismael Clemente, means that Testa Residencial – which owns the Group’s rental homes following the merger with Metrovacesa – may double in size thanks to the contribution of homes that the shareholder banks are expected to make.

At the time, Clemente revealed that Santander could end up contributing 4,000 homes and BBVA may provide 1,500 homes to Testa Residencial, which was initially created with 4,700 homes, a pro-forma gross asset value of €980 million and a net asset value of €617 million.

By contributing more homes, the banks may increase their stakes in the company, to the detriment of Merlin. Merlin currently owns 68.76% of the share capital, whilst the remaining 31.24% is held by the former shareholders of Metrovacesa.

Moreover, Testa Residencial’s Extraordinary Shareholders’ Meeting will approve an increase in the company’s share capital through monetary contributions for an overall value (nominal value plus issue premium) of €322.4 million with preferential subscription rights. (…).

Regarding the debut of the Socimi Testa Residencial on the stock market this year, the Corporate Director General of Merlin Properties, Miguel Ollero, said that it will not happen this year and that there is no rush, although the entity does have an obligation to debut on the market within two years.

Original story: Expansión

Translation: Carmel Drake