LONDON, England, Nov. 9 /CNW/ - Hammerson plc announces that it has
reached agreement to sell its entire Canadian business, Hammerson Canada Inc.,
to OMERS Realty Corporation for a net consideration of approximately C$600
million (238 million pnds stlg) payable in cash, after allowing for repayment
of local debt. The transaction, which is subject to certain conditions and
approvals, is scheduled to close between year-end 1998 and 1 February 1999.
OMERS Realty Corporation is a subsidiary of the Ontario Municipal Employees
Retirement System, the pension plan for local government employees in Ontario.
Hammerson Canada's portfolio, which includes three major shopping centres
and three office buildings in Ontario, provides a total of over 300,000 m2 of
space. The portfolio had a book value of C$765 million (303 million pnds stlg)
at 31 December 1997 and generated a net rental income of C$26.7 million (10.6
million pnds stlg) in the first half of 1998. These figures exclude the
enhancement of value over cost of certain development projects which were in
hand at year end 1997 and capital expenditure incurred during 1998. The
disposal of Hammerson Canada will reduce the group's annual overhead costs by
approximately 2.5 million pnds stlg. The impact of the sale, after taking
account of all associated costs and taxes, will be a slight reduction in
Hammerson's net asset value.
In terms of total property assets, Hammerson Canada represented
approximately 17% of the Hammerson group at 31 December 1997. Following the
disposal, around 72% of Hammerson's portfolio will be in the UK, with the
balance in France and Germany. Proforma gearing will be approximately 35%,
based on December 1997 valuations, and Hammerson will have cash and undrawn
committed facilities of more than 470 million pnds stlg. Hammerson expects, in
due course, to invest the net proceeds of the disposal in its businesses in
the UK and continental Europe.
Hammerson Canada Inc. intends to give notice of prepayment to the holders
of its two outstanding Canadian dollar bond issues.
Commenting on the transaction, Ronald Spinney, Hammerson Chief Executive,
``During 1998, we have received approaches from several North
American investors interested in acquiring Hammerson's Canadian
business. We instituted a competitive bidding process which has
resulted in the agreement with OMERS.
The disposal of the group's Canadian activities will allow us to
pursue the strategic goal of building Hammerson into a leading
European property company.''
Dale Richmond, President and CEO of OMERS, said:
``This transaction is an excellent opportunity for OMERS to
strategically expand its real estate portfolio with core assets. It
will bring our total real estate investments to approximately 12% of
the total fund.''
Hammerson was advised by J P Morgan & Co and D S Marcil.
/For further information: Ronald Spinney, Chief Executive; Christopher
Smith, Director of Corporate Affairs, Tel: 0171 887 1000; Fax: 0171 887 1010/
CO: Hammerson plc
-0- (CNS) Nov/09/98 12:57
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