TAG Immobilien AG is bringing a large part of the 75 million general credit line agreement with Colonia Real Estate AG into Colonia (debt-equity swap).
This measure is taken with a view to Colonia's need to refinance arising from the convertible bond 2006/2011 due for repayment on December 7, 2011, and serves to decrease the interest burden as well as enable the drawing of further shareholder loans from the general credit line approved by TAG.
The Colonia Real Estate AG Management Board today decided, with the approval of the Supervisory Board, to use the approved capital to increase Colonia's share capital from currently 32,994,633 by 11,384,010 shares, through a capital increase.
This capital measure leads to an equity increase at TAG Group level by up to approx. 20 million, and a 0.30 increase in the Net Asset Value (NAV) per TAG share. At the same time, this increases TAG's holdings in Colonia to approx. 70%.
"This step is mutually beneficial for both companies, as it allows us to optimize the capital structure at TAG level while also increasing the NAV. At the same time Colonia improves its balance sheet structure and opens up further options for refinancing," says Rolf Elgeti, CEO of TAG Immobilien AG.
Source: TAG Immobilien AG