Prelios: spin-off of real estate investments approved

Il Sole 24 Ore – 10th of August 2015 – The Board of Directors of Prelios is about to approve the spin-off of the company’s investment activity. After six months of negotiations with the lending banks, all aspects of the transaction, in which Lazard acted as advisor, have been refined with the banks and shareholders.The investments acquired in the 2000’s – assets of approximately 226 million euro, along with the related debt, approximately 70% of the total debt (174 million euro), and 20 million euro of cash to ensure financial balance – will be transferred to the new corporate vehicle (Centauro), of which Prelios will become a minority shareholder, while retaining significant rights.

Centauro will thus change hands, passing to its new shareholders, the banks (Intesa Sanpaolo and Unicredit), and Pirelli, which will inject additional liquidity through a capital increase of 12 million euro reserved for them. With respect to the Fenice Project, the transaction moves up by one year the schedule of the repositioning as pure management company strongly desired by Massimo Caputi and Sergio Iasi two years ago, and it is expected that it may be finalised by the end of 2015. The spin-off approved by the BoD is part of the process of shoring up the financial position of Prelios “services” with the aim of freeing the company of most of its debt and securing new resources through a guaranteed capital increase of a maximum of 66.5 million euro offered to the shareholders to revitalise the business and reduce its residual debt. In practice, the result will be a “new” Prelios, freed of the burden of its old investments, responsible exclusively for managing the financial and real-estate services business through eight operating companies.

The new Prelios aims to participate in the ongoing process of consolidation of the sector in Europe with an essentially balanced net financial position. Accordingly, the cash generated will no longer be put towards repaying debt, but towards developing the business. The board confirmed the goals set in the business plan, which calls for the pure management company to record revenues of 75 to 80 million euro and a positive EBIT of 6 to 8 million euro in 2015.

An extraordinary shareholders’ meeting is planned for August to approve the capital increase aimed at supporting the operation.

In the interim, the shareholders of Prelios are also making changes: Fenice, the vehicle that holds approximately 29% of Prelios, and that is controlled by Pirelli, Unicredit, Intesa and Feidos 11 (the company owned by the managers, in which the Pallavicini Diaz and Rovati families also hold an interest), has also seen a change in its ownership structure. Pirelli and the banks exercised the call options granted to them under the shareholders’ agreements and paid approximately 27 million euro for the shares of Feidos 11, which at the time invested approximately 20 million euro. According to rumours, Massimo Caputi and Sergio Iasi – who will continue to manage the company – will reinvest directly in Prelios on their own, through the capital increase.