Acquisition of Unicredit Building and Nusco Tower

RNS Number : 0494J

Globalworth Real Estate Inv Ltd

31 March 2015

 



Globalworth Real Estate Investments Limited

Globalworth closes Unicredit Building and Nusco Tower acquisitions

Globalworth closes €55m facility with Oak Hill Advisors and York

Guernsey, 31 March 2015: Globalworth Real Estate Investments Ltd. (AIM: GWI) ("Globalworth" or the "Company"), the real estate investment company targeting opportunities in Romania, is pleased to announce that it has closed the previously announced acquisitions of the Unicredit Building and Nusco Tower as well as a €55 million short-term holding company level secured debt facility (the "Facility").

The Unicredit Building has been acquired for approximately €43 million.  Unicredit Building is a class-A office property completed in 2012 and entirely leased to Unicredit Tiriac Bank, part of Unicredit Group ("Unicredit"), with a weighted average lease length of 7.3 years.   It is located in the north part of Bucharest close to Free Press Square and comprises approximately 15,500 square meters of gross leasable area over 15 floors above ground.  It has received a BREEAM "VERY GOOD" certification and has been ranked in the top 30 most architecturally impressive bank headquarter buildings worldwide. The asset has been independently valued at approximately €48 million and will add approximately €3.8 million to the NOI of the Company.

The Nusco Tower has been acquired for approximately €46 million. Nusco Tower is a modern office building strategically located in Bucharest's new central business district ("CBD") on Gara Herastrau. Nusco Tower has approximately 23,000 square meters gross leasable area ("GLA") on 20 floors above ground.  It is approximately 91% leased to well-known multinational tenants like Oracle, Bayer and Volksbank with a weighted average lease length of 2.1 years.   The asset has been independently valued at approximately €60 million and will add approximately €4.3 million to the NOI of the Company.

The equity portion of these two acquisitions has been funded with proceeds from the Facility (see further below for more details) whereas the debt has been provided by Unicredit.

The Facility has been provided by subsidiaries of funds managed by Oak Hill Advisors, L.P. and certain of its advisory affiliates^[1] ("Oak Hill") and York Capital Management Global Advisors, LLC, through York Global Finance Offshore BDH (Luxembourg) S.à r.l. ("York" and, together with Oak Hill, the "Lenders"). The Directors believe that the Company will be able to repay the Facility from the proceeds of the longer term finance referred to below and/or the proceeds of future debt and/or equity capital raisings. The Facility is consistent with the Company's stated plans to use debt financing for acquisitions and general corporate purposes, which can include short-term bridge holding level debt financings as was the case in February 2014 with the granting of the €65 million debt facility from UBS, which was acquired by York and Oak Hill in April 2014 and converted to equity in December 2014 in accordance with its amended terms.

Apart from funding the equity portion of the consideration for the Unicredit Building and Nusco Tower acquisitions, the Facility can be used for general corporate purposes, including funding its ongoing development projects.

The Directors believe that the Company will be able to conclude negotiations in the near term in relation to raising further long term finance which, amongst other things, will be used to repay the Facility and fund the Company's ongoing development projects, operating costs and currently uncompleted and future potential acquisitions.

Oak Hill has subscribed for €36,666,666 of the Facility. Alexis Atteslis is a non-executive director of the Company and Oak Hill's appointed director.

York has subscribed for €18,333,334 of the Facility. Akbar Rafiq is a non-executive director of the Company and York's appointed director.

The entering into of the Facility by Oak Hill and York constitutes a related party transaction under Rule 13 of the AIM Rules for Companies. The Directors (other than Mr Atteslis and Mr Rafiq) consider, having consulted with Panmure Gordon, that the terms of this transaction are fair and reasonable insofar as the Company's shareholders are concerned.

For further information visit www.globalworth.com or contact:  

Panmure Gordon (Nominated Adviser and Joint Broker                                Tel: [phone]

Andrew Potts

Cantor Fitzgerald Europe (Joint Broker)                                                                Tel: [phone]

Rick Thompson

David Foreman

Milbourne (Public Relations)                                                                                     Tel: [phone]

Tim Draper

About Globalworth

Globalworth Real Estate Investments Limited is a real estate investment company founded by real estate investor and developer Ioannis Papalekas currently focused on taking advantage of investment opportunities in Romania. The Company is Guernsey incorporated and has been declared by the Guernsey Financial Services Commission to be a registered closed-ended collective investment scheme. The Company's shares were admitted to trading on AIM in July 2013.

The Romanian market offers an attractive real estate investment proposition in the medium-to-long term. Globalworth believes that global investor capital flows will gradually move from markets considered as "safe havens" to more peripheral markets such as Romania in search of higher yielding investments. As a result, Romania should, in due course, become a more attractive destination for a wide investor audience. Globalworth anticipates holding an early mover advantage in and benefitting from this gradual shift in investor sentiment.

Additional information on the Facility

The Facility is for a maximum period of 12 months.  The Facility can be used for the equity tranche consideration in relation to the acquisitions of the Unicredit Building and Nusco Tower (amounting to an aggregate of approximately €35 million), for general corporate purposes and for its ongoing development programme.  Although there are restrictions on the Company's activities broadly commensurate with such a short term bridge facility (including Lenders' consent for any currently uncompleted and future acquisitions), the Directors believe that such restrictions will not impact the anticipated operation of the Company's business in any material respect.

The Facility provides for an issue premium, a cash coupon and a repayment premium which can vary depending on different repayment events and timing.  The Facility may be prepaid (as expected) or may be required by the Lenders to be repaid four months after drawdown.  In such circumstances, the total financing cost of the Facility would range between approximately €5 million and approximately €8 million. In the unlikely event that the Facility is outstanding for its full twelve‑month term, the total financing cost could increase to approximately €10 million.

The Facility also contains representations and warranties, covenants and events of default customary for a facility of this nature.

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[1] ESCF Investment S.à r.l., SPFC Investment S.à r.l., Asia CCF Investment S.à r.l. and CDP ESCF Investment S.à r.l.

 

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