Press
release
Paris, April 30, 2019
FY 2018/2019 consolidated net
loss: -€48.6 million €
Public Repurchase Offer by REOF Holding
potentially followed by a squeeze-out, subject to disposal of
Newtime.
M€ |
31.03.2019 |
31.03.2018 |
Var. (%) |
Net
rental income |
1.7 |
7.3 |
-76.7% |
Value
adjustment on buildings |
-21.8 |
43.6 |
-150.0% |
Consolidated net profit |
-48.6 |
25.1 |
-293.6% |
M€ |
31.03.2019 |
31.03.2018 |
Var. (%) |
Real
estate portfolio valuation (excluding duties) |
184.4 |
347.2 |
-46.9% |
Shareholder's equity |
4.8 |
52.4 |
-90.8% |
Consolidated net debts
Overall indebtedness ratio[1] |
182.8
99.2% |
298.1
85.9% |
-38.7%
+15.5% |
Liquidation NAV per share (diluted)1
Liquidation NAV per share (non-diluted) |
0.77
€
0.10 € |
2.20
€
2.50 € |
-65.0%
-96.0% |
Officiis Properties' Board of
Directors met today and approved the consolidated annual accounts
of the Company, which are currently being audited, for the period
from April 1, 2018 to March 31, 2019
Taking into account the amount of
debts the Company has accumulated and the announced disposal of its
principal asset, the management and the Board of Directors have
examined the applicability of going concern.
At March 31, 2019, the group
disposing of a net cash position of €17.3 million, sufficient to
meet its maturities over the upcoming 12 months, or until March 31,
2020, the annual accounts of the financial year have been
established on the going concern principle.
Decrease in Rental Income
Gross rents recorded during the FY
2018/2019 reached €4.6 million at March 31, 2019, compared with
€9.3 million during the previous fiscal year. This decrease of
approximately 50% is partly due to the disposals of the Salengro
(December 2017)[2], Think and
Imagine buildings (October 2018)2, and partly due to the departure
of the tenant Faurecia2 at the end of November, 2018.
As a reminder, a new lease at the
Newtime building covering 905 sqm and for €0.4 million of annual
gross rents was signed during the 1st semester of
the FY 2018/20192.
On February 14, 2019, Officiis
Properties and National Instruments, the last tenant of the
Magellan building, have agreed to an amicable termination amendment
to the commercial lease that bound them together, which will take
effect on June 1st, 2019.
At March 31, 2019, the financial
occupation rate of the buildings held by Officiis Properties and
its subsidiaries reached 66.2%.
Portfolio Value Declining
At March 31, 2019, on the basis of
the independent appraisal carried out by the company JLL, the
overall portfolio's rental market value stands at €11.4 million,
with a value including duties of €189.5 million, or a yield of
6.0%. The value excluding duties is estimated at €184.4 million,
declining by €21.2 million in comparison with the value at March
31, 2018 assuming a comparable scope (excluding the Think and
Imagine buildings).
This decline in value of -10.3%,
to a large extent occurring during the 1st semester of
FY 2018/2019, comes from the Newtime building, whose valuation in
the annual accounts of March 31, 2019 corresponds to its net
disposal price of €152.6 million, while it was €174.6 million in
the preceding annual accounts (see below).
Disposal of the Newtime building
expected on May 15, 2019
The conditions precedent of the
sales agreement of the Newtime building signed on February 6, 2019
have been lifted. The disposal of the building should thus occur on
May 15th, 2019. After
taking into account the amount of the repurchase of rent-free
periods granted to the tenants, the fees and expenses of advisors,
and the rental guarantee, the net amount to be perceived will
amount to €152.6 million.
Implications of the disposal of
the buildings on the financial structure of the Group
As a reminder, subsequently to the
disposals of the Think and Imagine buildings on October 26, 2018,
the group had used a portion of the sales proceeds to reimburse a
part of the mortgage loans underwritten by the bank Helaba.
Officiis Properties had proceeded
with the full reimbursement of its mortgage debt which stood at
€53.1 million, and Officiis Properties Paris Ouest 1 had reimbursed
115% of the amount of the debt backed by the financing of the Think
building, or €23.3 million. Following these partial reimbursements,
the remaining balance of the mortgage debt of the group stood at
€56.4 million.
On December 20, 2018, Officiis
Properties Paris Ouest 1 concluded with the bank Helaba a
refinancing of the mortgage of the Newtime building for an amount
of €92 million, and the group proceeded with a partial
reimbursement of €90.7 million of the subordinated non-banking loan
granted by the company TwentyTwo Credit 1 S.à.r.l.[3]
At March 31, 2019, the outstanding
amount owed by Officiis Properties with regards to this
subordinated non-banking loan stood at €79.7 million.
The net proceeds of the disposal
of the Newtime building, scheduled on May 15, 2019 (€152.6 million)
will be used to proceed with the full reimbursement of the mortgage
loan with Helaba for an amount of €92 million and also to partially
reimburse the subordinated non-banking loan for an amount of €60
million.
Increase of the Overall Debt
Ratio, decrease of the Revalued Net Asset Value
In January 2019, with the help of
a renowned investment bank, the Company launched a consultation
with around 15 financing companies with the goal of refinancing its
subordinated non-banking loan. Following this consultation, only
two indicative offers were received but were not retained, since
they would have had an adverse financial impact compared with the
present situation.
At March 31, 2019, the financial
debts amount globally to €199.8 million (including interest accrued
and/or capitalized), of which €92.3 million are mortgage
debts.[4]
The mortgage debt at March 31,
2019 (principal and accrued interest), net of available cash and of
cash reserves (€17.3 million), represents 40.7% of the value
excluding duties of the Company's portfolio value (€184.4 million),
compared with 34.6% at March 31, 2018.
The Overall Debt Ratio (including
mortgages, non-bank loans, convertible bonds and related accrued
and/or capitalized interests, net of cash and cash reserves)3 has
increased and is very high: it represents 99.2% of the value
excluding duties of the Company's portfolio value at March 31,
2019, compared with 85.9% at March 31, 2018.
The Company's consolidated
shareholders' equity stands at €4.8 million at March 31, 2019,
compared with €52.4 million at March 31, 2018 (-91%).
The shareholders' equity stands at
-€0.6 million and are less than half of the share capital.
The liquidation NAV[5] per share
on a non-diluted basis3 is €0.10 (€2.50 at March 31, 2018). On a
diluted basis, it stands at €0.77.
Outlook
From an operational standpoint,
following the departure of Faurecia, the principal tenant of the
Magellan building, the company has initiated renovation works on
this real estate asset. These works should cost €10 million (excl.
tax) and will be completed by December 2019.
From an organizational standpoint,
subject to the actual disposal of the Newtime building, it will be
proposed at the future extraordinary general meeting of the
shareholders of the Company to (i) simplify the structure of the
group by making it absorb its two subsidiaries and to (ii) modify
the date of the annual closing of accounts of the Company, which
would henceforth be the 30th of June of
each year, with a first set of accounts covering a 3 month period
until June 30, 2019.
On April 26, 2019, the company
REOF Holding S.à r.l, majority shareholder of the company, informed
it that once the disposal of the Newtime building has been
completed, pursuant to its commitments, it will implement a public
repurchase offer according to Article 236-6 of the Autorité des
Marchés Financiers ("AMF") General Regulations, for all securities
granting access to the shareholders' equity that it does not hold
as well as the convertible bonds of the Company at the following
terms:
REOF Holding S.à r.l has also
indicated that this public repurchase offer could be followed up
with a squeeze-out if, at its conclusion, it results in its holding
a large enough number of shares of the Company and/or securities
granting rights to its capital which would enable it to implement a
squeeze-out according to applicable regulations.
The Company has designated, on
March 29, 2019, the firm DK Expertises et Conseil, represented by
Messrs. Didier Kling and Teddy Guerineau as independent expert
called upon to provide a fairness opinion on the financial terms of
the above-mentioned offer (including in the context of the
potential implementation of a squeeze-out).
From a financial standpoint, the
company launched a consultation process with several banking
institutions to obtain a new mortgage loan backed by the Newtime
building, which would enable it to proceed with the partial
reimbursement of the non-banking loan.
As indicated above, the group has
a cash position large enough to meet its obligations over the
upcoming 12 months, or until March 31, 2020. The annual accounts
have thus been established on the going concern principle.
Nevertheless, beyond this date,
the Company estimates that it may not have the means to reimburse
the entirety of the subordinated non-banking loan and the
convertible bond of the Company which arrive at maturity on July
31, 2020. At March 31, 2019, the subordinated non-banking loan
stands at €79.9 million, and the convertible bonds stand at €28.1
million. As indicated above, following the disposal of the Newtime
asset, planned on May 15, 2019, the Company envisages reimbursing
€60 million of the non-banking loan.
The Company thus intends to
negotiate with its creditors, or will envision a capital increase,
once the public repurchase offer implemented by REOF Holding S.à
r.l is completed, and if applicable the squeeze-out is
realized.
If the outcome of these
negotiations were not to be favourable, or if the cash position
following a potential subsequent disposal of the Magellan asset
would not be sufficient, going concern may not be applicable.
Schedule
The trading of the shares of
Officiis Properties will resume starting on May 3rd,
2019.
The general assembly of the
shareholders will be held on June 28, 2019. A notice of the
convening of said assembly, as well as the regulatory documents to
the attention of the shareholders, will be published within the
required deadlines.
Key figures for FY 2018/2019
(Consolidated IFRS figures)
In €
million |
31.03.2019 |
31.03.2018 |
Var. (%) |
Profit and loss statement |
|
|
|
Net rental income |
1.7 |
7.3 |
-77% |
Operating Costs |
(3.0) |
(2.5) |
+20% |
Income from disposal
of investment property |
0.0 |
1.6 |
-100% |
Asset valuation
adjustment |
(21.8) |
43.6 |
-150% |
Net Operating
Income |
(23.0) |
50.1 |
-146% |
Financial Income |
0.0 |
0.0 |
|
Net
income from financial liabilities at fair value through
comprehensive income |
0.0 |
0.0 |
|
Interest and similar
expenses |
(25.6) |
(25.0) |
+2% |
Consolidated net income
Consolidated net income attributable to
shareholders |
(48.6)
(48.6) |
25.1
25.1 |
-294%
-294% |
|
|
|
|
In € million |
31.03.2019 |
31.03.2018 |
Var. (%) |
Balance sheet |
|
|
|
Investment
properties |
31.8 |
31.0 |
+3% |
Properties held for
sale |
152.6 |
316.2 |
-52% |
Other assets
|
20.4
17.3 |
18.3
11.7 |
+11%
+48% |
Total
assets |
204.8 |
365.5 |
-44% |
|
|
|
|
Shareholders'
equity |
4.8 |
52.4 |
-91% |
Non-current
liabilities
|
98.4
97.6 |
191.2
189.3 |
-49%
-48% |
Passifs courants
|
101.5
99.3 |
121.8
117.6 |
-17%
-16% |
Total
liabilities |
204.8 |
365.5 |
-44% |
|
|
|
|
Key
figures per share |
31.03.2019 |
31.03.2018 |
Var. (%) |
Liquidation NAV
(diluted basis)[6] |
0.77
€ |
2.20
€ |
-65% |
Operating cash-flow
(diluted basis)4 |
(0.68)
€ |
(0.57)
€ |
+19% |
Liquidation NAV
(undiluted basis)4 |
0.10 € |
2.50 € |
-96% |
Operating cash-flow
(undiluted basis)4 |
(1.14) € |
(1.00) € |
+14% |
Contacts
Pierre Essig, Chief Executive
Officer, Officiis Properties
52B rue de la Bienfaisance, 75008
Paris
Tél. +33 (0)1 83 92 33 86,
pierre.essig@officiis-properties.com
For more information, and/or to
contact us, please visit the company website:
https://officiis-properties.com
About Officiis Properties
Officiis Properties is a listed
property company that has opted for SIIC status and which invests
in office properties. Its real estate portfolio consists of two
office buildings in the Paris region.
Officiis Properties' shares are listed on Euronext
Paris Compartment C - ISIN: FR0010298901 under the name of Officiis
Propertie - Mnemonic OFP
Definitions
Financial vacancy
rate
The rate of financial vacancy is
obtained by dividing the vacant spaces multiplied by the market
rental value of these spaces as defined by the independent
evaluator by the sum of the vacant spaces multiplied by the market
rental value of these spaces as defined by the independent
evaluator and the rented spaces at their rent price contractually
determined by the leases. As a result of the disposals of the Think
and Imagine buildings and of the departure of the tenant Faurecia,
the rate of financial vacancy stands at 33.8% as of the date of
this press release.
Liquidation
NAV
The company has opted for the
accounting of its properties at their fair value excluding rights,
the Liquidation Net Asset Value (i.e. the amount that would be
returned to shareholders in case of immediate cessation of business
and of the sale of its buildings at their fair value excluding
duties), corresponds to its consolidated shareholders' equity
(€4.841 thousand) minus the "shareholders' equity" component
of the convertible bonds issued on July 31, 2015 (€2,786 thousand).
The liquidation NAV thus amounts to €2.055 thousand at March 31,
2019.
Liquidation NAV
per share
The Liquidation NAV per share on
an undiluted basis is obtained by dividing the Liquidation NAV by
the number of shares outstanding at the date of the calculation of
said Liquidation NAV, excluding shares held in treasury stock, or
19.810.619 shares at March 31, 2019.
The liquidation NAV per share on a
diluted basis is obtained by dividing the Liquidation NAV, adjusted
by the impact on shareholder's equity of the conversion of the
convertible bonds issued by the company on July 31, 2015 (+€20.969
thousand) by the number of potential shares on the date of
calculation of the liquidation NAV, excluding shares held in
treasury stock, or 33.332.977 potential shares at March 31, 2019.
The difference of 13,522,358 shares corresponds to the number of
shares that would be created by the conversion of the convertible
bonds issued by the company on July 31, 2015.
Operating
Cash-flow
Operating Cash flow is defined as
consolidated net income (-€48.573 thousand), restated for
changes in the fair value of assets (€21.807 thousand), the impact
of disposals of real estate (€-64 thousand), loan issuance costs
(€1.570 thousand), the reevaluation of isolated financial
instruments (€2.944 thousand) and the discounting of tenant
security deposits (-197 thousand). Capitalized interest
(non-bank borrowings, convertible bonds) is not restated for the
calculation of the Operating Cash flow since the cash outflow
remains due even if deferred. Operating Cash flow was -€22.513
thousand at March 31, 2019.
Operating
Cash-flow per share
Undiluted Operating Cash flow per
share is calculated on the basis of the weighted average number of
outstanding shares during the period under review (excluding shares
held in treasury stock), or 19.831.284 shares for the period from
April 1, 2018 to March 31, 2019.
The diluted Operating Cash flow
per share is established on the basis of the weighted average
number of potential shares (see above definition of the liquidation
NAV per share) during the period under review (excluding shares
held in treasury stock), or 33.353.642 shares for the period from
April 1, 2018 to March 31, 2019.
Overall Debt
Ratio
The Overall Debt Ratio compares
the sum of:
-
Bank loans
(principal)
92.000 K€
-
Non-bank loans and shareholders' loans
(principal)
72.084 K€
-
Convertible
bonds
26.599 K€
-
Accrued interests and
commissions
9.410 K€
-
Available cash and
equivalent
-17.264 K€
Total Consolidated Financial
Debts
182.833 K€
to:
Ratio :
99,2%
[1] See
definitions below.
[2] See press
releases from 12/21/2017, from 10/29/2018, and from 11/29/2018.
[3] See press
release from 12/21/2018
[4]In the IFRS
consolidated accounts, financial debts amount to €196.9 million, of
which €0.5 million are tenant security deposits and €91.5 million
are mortgage debts because of the reclassification of the
"shareholders' equity" component of the convertible bonds (€2.8
million), the amortization of financial debts' issuing costs (€0.8
million) and the value adjustment of interest rate swaps (€0.1
million).
[5] See
definitions below.
[6] See
definitions below.
2018/2019 FY Results
This
announcement is distributed by West Corporation on behalf of West
Corporation clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Officiis Properties via Globenewswire