PSPI (AIM: PSPI), the specialist European real estate investment and financing company, announces an update on its previously announced strategic review.
The Company is pleased to announce that it has signed a contract to dispose of a German partnership, which owns two care home properties in Langen and Luzerath which are leased to Marseille Kliniken AG (“MK”), for a gross consideration of €13.4 million in cash. The sale is expected to complete within six weeks, although 94 per cent. of the sale proceeds have already been received by the Company. The consideration payable represents a discount of 1.8 per cent. to the latest independent valuation (net of estimated buyer’s costs) undertaken by Colliers International at 30 June 2014, and a 7.5 per cent. discount to the carrying value of the assets as set out in the Company’s unaudited interim results for the six months ended 30 June 2014 (gross of estimated buyer’s costs), announced on 26 September 2014. The two care homes generated net rental income of €1.3 million and a profit of approximately €0.7 million for the year ended 31 December 2013.
Of the proceeds of sale, the Group intends to use €10.7 million to repay debt secured against properties leased to MK in Germany, settle transaction costs, including prepayment penalties, and pay interest rate swap breakage costs. The balance of the proceeds will be used for general working capital purposes, including a £0.5 million repayment of debt secured against the UK investment properties.
Patrick Hall, the Chairman of PSPI, commented:
“The Company is pleased to announce the conclusion of this sale after protracted negotiations with the buyer. The planned use of the sale proceeds reduces the aggregate loan to value for the retained portfolios in Germany and the UK from 37.7 per cent. to 31.3 per cent.
The Company continues to test the market for all of its assets and will make further announcements as appropriate.”
For further information please visit www.pspiltd.com or call:
Dr. D. Srinivas
020 7766 7000
Smith Square Partners
0203 696 7260
(Nomad and Broker)
020 7601 6100