Denver-based ProLogis, an international provider of distribution facilities and property fund manager, has announced the receipt of USD845m in cash proceeds from the sale of its operati
Denver-based ProLogis, an international provider of distribution facilities and property fund manager, has announced the receipt of USD845m in cash proceeds from the sale of its operations in China and property fund interests in Japan to affiliates of GIC Real Estate.
The transaction generated total cash consideration of USD1.345bn, plus the assumption of all liabilities. Approximately USD500m of the cash consideration was received in February 2009, with the remaining USD845m received following delivery of the required audited financial statements. Proceeds will be used principally to reduce debt.
In addition, the USD140m sale of ProLogis Park Misato II to GIC RE will be completed within 30 days. As a result, disposition proceeds and the related gain will be realised in the second quarter of 2009.
"We are pleased to announce receipt of the remaining cash proceeds from the Asia transaction," says Walter C. Rakowich, chief executive officer (pictured). "Including the sale of this additional asset in Japan, we will generate approximately USD1.5bn in cash proceeds, allowing us to make substantial progress toward our goal of de-leveraging our balance sheet by USD2bn by the end of 2009."
Additionally, the company has actively addressed a number of its 2009 fund-related debt maturities.
ProLogis successfully completed a three-year extension of the USD167m secured loan in ProLogis North American Industrial Fund III. As part of the extension, ProLogis and its fund partner agreed to reduce the loan by USD60m.
ProLogis European Properties recently announced plans to repay its CMBS debt of EUR335.9m (USD456.8m) on 5 April 2009, three months earlier than contractually required, using a combination of cash from operations, available capacity under its EUR900m (USD1.22bn) unsecured credit facility and approximately EUR43m (USD58.5m) from the crystallization of related derivatives proceeds. This repayment releases roughly EUR550m (USD748.0m) of secured properties to PEPR’s unsecured asset pool.
Finally, as previously disclosed, ProLogis recently closed on a USD120m, ten-year secured financing on behalf of ProLogis California Fund. The financing has a loan-to-value of approximately 50 per cent with 11 industrial properties located in the Los Angeles Basin and Inland Empire as security. The proceeds were used to partially refinance a USD176m secured debt facility that had previously been extended to March 2010.
In November 2008, ProLogis announced a series of immediate, definitive actions and outlined a strategic plan to reduce debt, de-risk its development pipeline and right-size the company. The plan includes re-financing and/or renegotiating debt maturities on ProLogis’ balance sheet and in its property funds, halting new development starts, shrinking the development pipeline, de-levering the balance sheet, and retaining capital through reductions in G&A and the common dividend.
