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Martin Andres Jaco — Foto: Claudio Belli/Valor
BR Properties agreed to sell 12 business buildings and two plots of land to Brookfield. The deal signed Wednesday is expected to generate a net result of R$5.5 billion, the company’s chief financial officer André Bergstein said.
The amount will be set aside for prepayment of debts –BR Properties’s net debt amounts to R$2.1 billion – but the company has not decided whether it will be fully paid.
The sale makes sense because the company’s portfolio is mature and able to generate a capital gain, considering that high interest rates increase the company’s debt, BR Properties CEO Martin Jaco said. “The financial cost erodes our result, but the financing was prepared to be prepaid. For that, we needed cash,” he told Valor. “We are going to eliminate this financial cost.” BR Properties expects to make cash flow positive with the proceeds of the deal.
The company is also studying which portion of the proceeds will be distributed as dividends to shareholders. The remainder is likely to be invested in the company’s logistics warehouse projects and part will remain in cash.
The company is rebuilding its portfolio in the industrial and logistics segment after having sold all such assets four years ago.
BR Properties has no plans to rebuild the size of its portfolio in the short term, the CEO said in a conference call about the deal. “The market is not easy, so we will maintain this volume for some time,” he said.
Following the approval of the sale, the next step will be to discuss new investments or a plan to take the company private.
The sale includes six business buildings in São Paulo (the entire portfolio of the segment in the city), one in Alphaville (an affluent district on the outskirts of São Paulo), one tower in Brasília and four towers in Rio de Janeiro, totaling a gross leasable area (GLA) of 385,400 square meters. The two plots of land are located in São Paulo, with a GLA of 9,300 square meters.
The deal covers more than half of BR Properties’s portfolio. Now, the industrial segment, which includes logistics warehouses and land for them, accounts for the largest area in the portfolio. The company remains in the business segment only in Rio de Janeiro, with properties like Passeio Corporate, a project with 82,800 square meters of GLA, and with a smaller project in Minas Gerais.
According to Mr. Jaco, the company is getting rid of 100% of vacant offices with the sale, which means a reduction in costs.
The company said Thursday that it will receive 70% of the value on the closing date of the acquisition of each property, and that the remaining 30% will be paid by Brookfield 12 months after the deal is closed, in amounts corrected by inflation and the interbank deposit rate (CDI).
The next steps are the approval by an extraordinary general meeting, since it involves more than 50% of the value of the company’s assets, and waiting for the approval of antitrust body CADE, which could take 45 to 70 days, Mr. Bergstein said.
Source: Valor International