Citycon Oyj ("Citycon") has today completed the acquisition of all the shares in the Norwegian shopping centre company Sektor Gruppen AS ("Sektor") from its owners Joh Handel Eiendom 1 AS, Varner Invest AS and K&S Holding AS (the "Sellers") (the "Transaction").
The debt-free total purchase price payable by Citycon for all of the shares in Sektor was EUR 1,467 million (NOK 12,320 million with exchange rate of 8.4). The cash purchase price paid by Citycon today in connection with the closing of the Transaction amounted to approximately EUR 540 million (NOK 4,538 million with exchange rate of 8.4) after customary balance sheet adjustments, but it may be further adjusted based on Sektor's updated, revised consolidated balance sheet following the closing of the Transaction. These adjustments define the possible adjustment cost that may be payable by Citycon or the Sellers.
In addition to the cash purchase price for the Transaction, Citycon has today paid the funds required for Sektor to implement the premature redemption of its three secured bonds amounting to a total of approximately EUR 222 million (NOK 1,865 million with exchange rate of 8.4) as well as for the settlement of the approximately EUR 42 million (NOK 350 million with exchange rate of 8.4) existing shareholder loan granted by the Sellers to Sektor. These payments were financed through a combination of (i) the proceeds of EUR 604 million from Citycon's rights issue that was completed on 13 July 2015 and (ii) a drawdown of EUR 222 million under the bridge financing facilities amounting originally to a total maximum limit of EUR 400 million given by Danske Bank A/S, Helsinki Branch and Pohjola Bank plc. The loans drawn down under the bridge financing facilities will mature in June 2016. In addition, Sektor has obtained consents regarding Sektor's current bank financing facilities amounting to approximately EUR 671 million (NOK 5,639 million with exchange rate of 8.4) from the respective lenders that such bank financing facilities will remain in force after the closing of the Transaction until April 2016.
Following the closing of the Transaction, Citycon considers available alternatives to optimise its long term financial structure and refinance the bridge financing facilities and the existing bank financing facilities of Sektor before their respective maturity dates. Citycon intends to raise the funds required for the refinancing through, among others, proceeds obtained from potential divestments of non-core assets, bond issuances and bank debt.
Citycon's outlook announced for the year 2015 regarding EPRA Operating profit and EPRA Earnings does not yet take into account the effects of the Transaction. As the EPRA EPS (basic) forecast announced by Citycon is based on the current number of shares in the company, Citycon announced on 13 July 2015 that it had adjusted this forecast to reflect the combined property portfolio of Citycon and Sektor and the increased number of shares due to the rights issue completed on 13 July 2015. Citycon forecasts that its EPRA EPS (basic) will be EUR 0.155–0.175. Citycon intends to update its guidance also in other respects to reflect the effects of the Transaction in connection with the publication of the Q2/2015 interim report on 15 July 2015.
Upon the completion of the Transaction, Citycon's assets under management increased from EUR 3.4 billion to EUR 4.9 billion and Citycon now owns a total of 55 shopping centres and 25 other retail properties.
Further information on the Transaction and its effects on Citycon has been disclosed in Citycon's stock exchange releases of 25 May 2015 and 18 June 2015 as well as in the offering circular relating to the rights issue dated 18 June 2015.
Helsinki, 14 July 2015
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Citycon is a leading owner, manager and developer of urban grocery-anchored shopping centres in the Nordic and Baltic region, managing assets that total approximately EUR 5 billion and with market capitalisation of EUR 2 billion. Citycon is the No. 1 shopping centre owner in Finland and Estonia and among the market leaders in Norway and Sweden. Citycon has also established a foothold in Denmark. www.citycon.com