Orco Property Group has completed the agreement to sell its stake in its Russian operations to a local investor.
This 53-million sale includes the logistics business, the residential projects, the offices and land plots that are collectively valued at circa 57 million. The agreement contains a further provision entitling Orco to 20% of future sales proceeds in the event they exceed the 53 million.
Formal closing occurred on October 14, 2011.
An initial payment of 7,950,000 was received on closing. Under the agreements a total sum of circa 13,200,000 (inclusive of the initial payment) is payable in cash before year end 2011 with the balance to be paid in 2012.
In Russia, Orco retains Pokrovka, which is part of Mamaison Hotels and Residences, and a 10% stake in the Filion shopping center.
"In a challenging global market and economic situation, real estate assets are showing their resilience, this transaction is positive for the company and its stakeholders. Orco will continue the implementation of its strategy of focusing on our four major cities, Prague, Berlin, Warsaw and Budapest and on of deleveraging," stated Jean-Francois Ott, President & CEO of Orco Property Group.
Source: Orco Property Group