Property Group secured through new owner structure

Lagt online 07.08.09

In 2007, Sjælsø sold a number of retail projects in Sweden, Norway and Finland to det Danish property company Property Group for delivery in 2008 and 2009 as the projects were completed.

In connection with the delivery of the projects, Property Group encountered certain financing problems as the planned financing and subsequent sale of the portfolio to wealthy investors failed to materialise. To ensure the completion and handover of the projects without having to effect a resale in the difficult market of 2008, Sjælsø decided to contribute to the financing of the projects by allowing part of the purchase price to stand for later payment along with a number of financiers.

The existing owners of Property Group and a number of the company’s creditors have signed an agreement for the restructuring of Property Group which will provide a stable, financial platform for the company’s future, by, for instance, a substantial conversion of debt to equity and subordinated loans. As part of the restructuring, a number of property portfolios have been compiled by Property Group into Nordic Property Assets A/S. These include the portfolio delivered by Sjælsø.

The formation of Nordic Property Assets provides a sound basis for future, stable operations and the ongoing development of the property portfolios so that the portfolios’ value can be maintained and, in the longer term, increased. Nordic Property Assets will comprise a total property portfolio valued at approximately DKK 2.5 billion.

In connection with the establishment of Nordic Property Assets, Sjælsø has decided to convert approximately 15% of the company’s receivables to share capital in Nordic Property Assets on favourable terms to enable Sjælsø to monitor the portfolio’s development and thus ensure the repayment of Sjælsø’s loans when market and financial conditions permit. As a result, Sjælsø owns approximately 31% of Nordic Property Assets and is on the company’s Board of Directors.

Read more www.propertygroup.dk or www.sjaelsoe.dk

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