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Acquisition of the German residential portfolio from LFH Portfolio Acquico S.À R.L. and Peach Property Group AG
GLOBE TRADE CENTRE S.A.
(Incorporated and registered in Poland with KRS No. 61500)
(Share code on the WSE: GTC.S.A)
(Share code on the JSE: GTC ISIN: PLGTC0000037)
GLOBE TRADE CENTRE S.A.
Current report number: 21/2024
Date: 16 November 2024
Subject: Conclusion of the share purchase agreements aimed at the acquisition of the
German residential portfolio from LFH Portfolio Acquico S.À R.L. and Peach Property
Group AG and delayed disclosure of inside information on the approval of this acquisition.
The Management Board of Globe Trade Centre S.A. (the "Company" or "GTC") hereby
announces that on 15 November 2024 the Company entered into a series of share purchase
agreements with, inter alia, Peach Property Group AG and LFH Portfolio Acquico S.À R.L., as the
sellers, leading to the acquisition of the portfolio of residential assets in Germany ( the "Portfolio")
currently held by Peach Property Group AG (the "Transaction"). The closing of the Transaction is
conditional upon the fulfillment of a number of conditions precedent specified in the Transaction
documentation.
The envisaged Transaction assumes that the Company will indirectly acquire:
(i) from Peach Property Group AG 89.9% of the limited liability partnerships: Kaiserslautern I
GmbH & Co. KG (or its legal successor) and Kaiserslautern II GmbH & Co. KG (or its legal
successor) (the "Portfolio Partnerships"), and
(ii) from LFH Portfolio Acquico S.À R.L., and from ZNL Investment S.À R.L., as a result of a
series of transactions, up to 89.9% of the limited liability companies: Portfolio
Kaiserslautern III GmbH, Portfolio KL Betzenberg IV GmbH, Portfolio KL Betzenberg V
GmbH, Portfolio Kaiserslautern VI GmbH, Portfolio Heidenheim I GmbH, Portfolio
Kaiserslautern VII GmbH and Portfolio Helmstedt GmbH (the "Portfolio Companies").
at an adjusted property value of approximately EUR 448 million based on 100% ownership of the
Portfolio.
As the first tranche, the Company, indirectly through its subsidiary, GTC Paula S.À R.L., will
acquire 89.9% of the shares in the Portfolio Partnerships and 79.8% of the shares in the Portfolio
Companies for a total consideration comprising EUR 167 million in cash and the Participating
Notes with a total nominal value of approximately EUR 42 million (as described in letter C
(Description of the Participating Notes)), subject to adjustments. Peach Property Group AG will
retain a 10.1% stake in the Portfolio Partnerships and the Portfolio Companies, while co-investors,
ZNL Investment S.À R.L. and LFH Portfolio Acquico S.À R.L., will retain remaining specified
shares. The Company will also be granted an option to purchase additional 10.1% of the Portfolio
Companies at an option price determined in accordance with the formula applicable for the
calculation of the consideration amount (as adjusted), provided that no reinvestments will be
made. Consequently, the Company will acquire 89.9% of the Portfolio Partnerships and up to
89.9% of the Portfolio Companies.
A. Portfolio overview
The Portfolio is centred around three cities in Germany: Kaiserslautern, Helmstedt, and
Heidenheim. It has a residential share of close to 100% and a n occupancy rate of around 87.4%.
In total, the portfolio comprises 5,165 residential, 47 commercial units, 71 other units, and 2,108
parking units with a total lettable area of 324,167 sqm. The main asset classes by year of
construction are properties built in 1950-1969 and newer properties built in 1970-1984.
B. Funding structure
Under the agreed terms and conditions, the Transaction will be funded through:
1. assumption of existing senior bank loans of approximately EUR 185.4 million currently
provided to certain project companies by multiple banks including: DZ Hyp AG,
Landesbank Baden-Württemberg, Sparkasse Kaiserslautern, and Volksbank BRAWO eG,
loans to be either transferred into the new structure or refinanced by a similar loan
provided by Landesbank Baden-Württemberg or DZ Hyp AG;
2. Participating Notes, which will be offered or transferred to LFH Portfolio Acquico S.À R.L.,
as described in letter C (Description of the Participating Notes) below.
3. the funding gap between the equity and senior bank loans will be filled through senior
secured debt raised by GTC Group, further described in letter D (Debt financing) below.
C. Description of the Participating Notes
The Company is planning to issue participating bonds under the Polish Act on Bonds, with a total
nominal value of approximately EUR 42 million (the "Participating Notes"). The Participating
Notes will be offered or transferred to LFH Portfolio Acquico S.À R.L. The Participating Notes will
be unsecured, subordinated to all other liabilities due to the creditors of GTC and will have a final
effective maturity beyond that of all of GTC's debt (i.e. 2044).
Each year, if the General Meeting adopts a resolution on distribution of profit and payment of
dividend (the "Resolution"), the Participating Notes will entitle the noteholders to participate in the
Company's profit. If the Resolution declares that no dividend is due, no payment will accrue or be
payable for the Participating Notes. If the Resolution declares that the dividend is to be paid, the
amount of the payment payable in respect of the Participating Notes will correspond to the amount
of the dividend payable in respect of the number of shares which will be determined upon the
issuance of the Participating Notes as (i) the aggregate nominal value of the Participating Notes;
divided by (ii) the average GTC share price on the regulated market as at the date designated
prior to the issue date of the Participating Notes.
Under the terms and conditions of the Participating Notes, the Company may exercise its right to
early redemption if the General Meeting adopts a resolution to increase the Company's share
capital (which would require the exclusion of pre-emptive rights of the Company's shareholders).
In this case, the Participating Notes will be redeemed upon the subscription of warrants. The total
number of shares that the warrants entitle holders to will equal the number of GTC's shares
calculated based on the payments payable in respect of the Participating Notes as provided
above.
D. Debt financing
To provide further financing for the Transaction, the Company has secured a five-year EUR 190
million loan (the "Loan"), to be provided by private investment firms (the "Lenders").
The Loan will be entered by an indirect subsidiary of the Company, GTC Paula S.À R.L. (the
"Borrower"), and will be guaranteed by the Company, GTC Holding S.À R.L., the Borrower, and
selected direct and indirect subsidiaries of the Borrower, to the extent legally permissible.
The Loan will be further secured by encumbrances on various collateral assets, including: (i) a
pledge over the shares in GTC Holding S.À R.L., (ii) a pledge over the shares in the Borrower, (iii)
a pledge over all accounts of the Borrower and the receivables from its subsidiaries , (iv) a pledge
over financial instruments representing the rights to the Kildare project, (v) share pledges over
wholly-owned direct subsidiaries of the Borrower, newly established under Luxembourg law, are
included, specifically those subsidiaries holding 100% ownership of the entities owning real estate
assets referred to as the "Ericsson HQ" office building and the "evosoft HQ" office building (both
located in Hungary, held by GTC Univerzum Projekt Kft.), the "Pillar" office building (located in
Hungary, held by Kompakt Land Ingatlanhasznosító Kft.) and the "Ada Mall" shopping mall
(located in Serbia, held by Commercial Development d.o.o. Beograd), and (vi) pledges over
wholly-owned direct subsidiaries of the Borrower, newly established under the laws of the Grand
Duchy of Luxembourg, holding direct shares in the Portfolio Companies and the Portfolio
Partnerships.
The Loan will be ranked at least pari passu with all other current and future unsecured and
unsubordinated obligations of the Borrower.
E. Strategic rationale for the Transaction
The Management Board of GTC strongly believes that the Transaction has sound strategic
rationale for GTC and is aligned with the Company's long-term strategy given:
• expand into higher rated European real estate markets with Germany in particular being a
AAA-rated country known for its economic stability and strong demand for residential
properties. Post-Transaction 19% of GTC Group combined GAV and 30% of its rental
area to be located in German;
• strong German market fundamentals such as an increasing housing deficit, low vacancy
rates, and decreasing interest rates lead to a favorable outlook;
• quickly diversify GTC Group's asset base by acquiring 5,165 residential units, i.e. about
one fifth of GTC Group's portfolio to be residential post-Transaction;
• opportunity for value creation by enhancing value through (i) the management and
modernization of the properties and (ii) the disposal of a part of the Portfolio at improved
prices;
• a comprehensive ESG strategy, using a combination of sophisticated hardware such as
heat pumps and AI software components to create sustainable living space further
enhancing the Portfolio value;
• leveraging management's residential expertise and combine it with a select team from
Peach Property Group AG to create a local taskforce to manage the Portfolio ; and
• improved creditworthiness, with a more balanced maturity profile and a strong balance
sheet benefitting from funding of the Transaction with equity-like instruments.
F. Delayed disclosure of inside information
On 8 November 2024, the Transaction was approved by the Company's Supervisory Board in
accordance with article 10 section 1 letter c) of the articles of association of the Company.
On 8 November 2024, the Company decided to delay the disclosure of the inside information on
the approval of the Transaction by the Supervisory Board on the basis of Article 17 (4) of the
Regulation of the European Parliament and of the Council (EU) No. 596/2014 on market abuse
(market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of
the Council, and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (inside
information) due to the fulfilment of the conditions justifying such delay, including the likeliness
that the disclosure of such information would prejudice the legitimate interests of the Company
since such disclosure was likely to negatively affect the course and outcome of the negotiations of
the series of transactions aimed at the acquisition of the Portfolio (described in more detail in
section A of this current report), and, consequently, the terms of the Transaction.
Legal basis: Art. 17 (1) and (4) of the Regulation of the European Parliament and of the Council
(EU) No. 596/2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC
of the European Parliament and of the Council and Commission Directives 2003/124/EC,
2003/125/EC and 2004/72/EC (inside information).
Signed:
/s/ Gyula Nagy /s/ Zsolt Farkas
President of the Management Board Management Board Member
Date: 18 November 2024
Sponsor: Investec Bank Limited
Date: 18-11-2024 07:05:00
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