ERET European Real E

TIDMERET

RNS Number : 4111J

European Real Estate Inv Tst Ltd

11 June 2014

European Real Estate Investment Trust Limited

11 June 2014

The Board of European Real Estate Investment Trust Limited ("the Company") is pleased to announce a settlement agreement has been signed with Panrico, the tenant of the four properties owned by the Company in Spain and who has undertaken a significant business restructuring over the last 9 months, to restructure three of the existing leases and sell the Murcia property which was damaged by fire in July 2013.

The main terms of the settlement agreement are as follows:

Panrico will purchase the Murcia property from the Company at the end of July 2014. The Company will receive net consideration totalling EUR3.4 million made up of two payments; EUR1.9 million will be paid by Panrico over a period of 18 months and EUR1.5 million will be paid immediately by the insurance company as a settlement following the fire that occurred in Summer 2013. The Murcia asset was valued at EUR3.5 million at end of 2013 and represented 5.2% of the Company's portfolio by value;

The rent paid by Panrico for the remaining 3 assets will be reduced by 25% in exchange for a lease extension of 8.5 years, therefore reducing rental income from EUR3.28 million pa to EUR2.46 million pa on a like for like basis. The rent reduction and lease extensions will come into effect from 1 January 2014. The restructured leases will have an average outstanding maturity of more than 25 years. After 2018, the Company will have an option to re-instate the rental level and lease extension back to the amount currently being paid and the initial term agreed, the condition being that Panrico's financial standing reaches a certain agreed hurdle;

The guarantees provided by Panrico in respect of its lease obligations will be improved (14 months of cash rental guarantee and a cross-default mechanism across all leases); and

All existing litigation will be withdrawn.

This restructuring is consistent with the strategy announced by the Company to complete asset management initiatives on the remaining properties in the portfolio. As referred to in previous announcements, Panrico has been through a significant restructuring plan with all of its stakeholders and we have been in dialogue with them during this period with a view to reaching a settlement which is in the best interests of shareholders.

For further information, please contact:

Praxis Fund Services Limited

   Shona Darling                                       Phone: +44(0) 1481 755528 

Cenkos Securities plc

   Dion Di Miceli                                        Phone: +44 (0) 20 7397 1921 

Schroder Property Investment Management Ltd

   Duncan Owen / Tony Smedley                          Phone: +44(0) 20 7658 6000 

This information is provided by RNS

The company news service from the London Stock Exchange

END

PFUEASKFFANLEFF

European Real E (LSE:ERET)
Historical Stock Chart
Von Dez 2024 bis Jan 2025

European Real E (LSE:ERET)
Historical Stock Chart
Von Jan 2024 bis Jan 2025