EUROPE-ProLogis European Properties has completed the sale of it ProLogis European Properties Fund II. PEPR maintained a one-third investment in the fund until divesting of it this week to six institutional investors.
The $17.1 million transaction also clears PEPR of $223.3 million of future committments, according to a release issued about the sale. The initial two-thirds of the sale were completed in December. And total, the divestment of the fund frees PEPR from $669.9 million of further investments to be made before August 2010.
“Since announcing our strategic initiatives to improve liquidity and address debt maturities, we have successfully amended our most pressing debt covenant and disposed of our entire investment in PEPF II,” says Peter Cassells, CEO of PEPR, in a release of Q4 results. “The disposal reduces outstanding debt and, more significantly, eliminates our obligation to finance further investments of [$669.9 million] in PEPF II over the next 18 months.”
The proceeds from the sales PEPR will utilize to reduce debt. The company’s debt increased in 2008 by 8.6% from 2007. The increase to $2.7 billion is in part due to PEPR’s $313.6 million investment in Fund II, according to reports. M3 Capital Partners was the financial advisor on the deal.
According to year-end numbers, PEPR’s portfolio consists of 246 buildings in 11 European countries, with a net open market value of $4.4 billion. PEPR’s holdings are 97% occupied. From June 2008 to December the company experienced a 9.2% valuation decrease of its portfolio.
“We continue to aggressively take actions to strengthen the balance sheet, improve liquidity through active and open dialogue with our banking partners, complete new leases and renewals and serve our customer base so as to return the best possible long-term performance to our investors” Cassells says.