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MRM : MRM: Signing of an investment agreement concerning the acquisition by SCOR of a majority stake in MRM



 MRM : MRM: Signing of an investment agreement concerning the acquisition by
                       SCOR of a majority stake in MRM

 

This press release is not to be issued in the United States, Canada, Australia
or Japan and it is not for publication or distribution in the United States,
Canada, Australia or Japan. This announcement is neither an offer to purchase
nor a solicitation of an offer to sell any of the securities in the United
States or in any other country. Securities may not be offered, purchased or
sold in the United States without being registered under the U.S. Securities
Act of 1933, as amended (the "U.S. Securities Act"), or subject to an
exemption from the registration requirements of the Securities Act. MRM's
securities as referenced herein, have not been and are not intended to be
registered under the U.S. Securities Act and MRM is not planning to make a
solicitation of an offer to purchase or sell any securities in the United
States.

 Press release 

MRM has reported today its 2012 full-year results.This announcement is the
subject of a separate press release available on the mrminvest.com website

An information meeting will be held on March 12, 2013 at 2.30 p.m. and will
take place at the Conference Center Edouard VII (Centre de Conférences Edouard
VII), 23 Square Edouard VII, 75009 Paris. A presentation will be available on
MRM's website, www.mrminvest.com.

Signing of an investment agreement concerning the acquisition by SCOR of a
majority stake in MRM

 

 

Paris, March 8, 2013: MRM (Euronext ISIN code FR0000060196), a listed real
estate company owning a portfolio of retail and office properties worth €269
million, is announcing today the signing of an investment agreement with SCOR
SE ("SCOR") aiming at increasing MRM's equity by means of SCOR acquiring a
majority stake in MRM's share capital. This operation that would take the form
of a share capital increase and is subject to the restructuring of the
company's bank liabilities, the terms of which have been pre-negotiated by MRM
with its partner banks, and the conversion of its bond debt^[1] carried by its
subsidiary DB Dynamique Financière into MRM shares with a minimum conversion
threshold of 85%. MRM faces a high level of bank and bond debt, major
repayments falling due^1,^[2] between now and the end of 2013, and a difficult
liquidity position. This capital increase would therefore allow for the
complete restructuring of its liabilities, giving it a durable financial
structure and confirming MRM's SIIC status.

Acquisition of majority stake by SCOR

 

The investment agreement sets out the  terms and conditions of an increase  in 
MRM's  share  capital  with  a  cancellation  of  shareholders'   preferential 
subscription rights in favour of SCOR, the amount of which shall be  comprised 
between €41 million to €54 million,  depending on the rate of conversion  into 
MRM shares  of the  bonds issued  by the  subsidiary DB  Dynamique  Financière 
(option described  in the  corresponding  paragraph hereunder).  This  capital 
increase would enable SCOR to hold 59.9% of MRM's share capital (excluding the
dilutive effect resulting,  as the  case may be,  from the  exercise of  stock 
warrants as mentioned herein), in  line with the maximum threshold  authorised 
for SIIC companies.

The subscription price paid by SCOR within the framework of the share  capital 
increase shall  be determined  on the  basis of  a valuation  discount of  €45 
million to the book value of MRM's equity (i.e. €16.9 million at  December 31,
2012), plus  (i)  €10  million  corresponding to  a  reduction  in  bank  debt 
(described below) and (ii) the nominal amount of bonds converted into shares.

The Board of Directors has appointed Didier Kling & Associés as an independent
expert to give an opinion  on the fairness of  the subscription price for  the 
reserved share capital increase.  The firm commented on  the progress made  in 
its diligences at the Board meeting of March 7, concluding that:

"Subject to the receipt of the final  legal documentation, we do not have  any 
specific observations to  make on  the values  obtained that  would call  into 
question the fairness of the capital increase reserved for SCOR. Our valuation
work on  MRM shares  has been  carried out  using a  multi-criteria  approach, 
taking account  of  associated transactions  and  agreements and  the  general 
background to the share capital increase."

MRM's current shareholders  will keep 8%^[3]  of the share  capital after  the 
conversion of bonds into MRM shares and the share capital increase reserved to
SCOR. They shall also  benefit from the allocation  of free stock warrants  at 
the  rate  of  one  warrant  per  existing  share.  Two  warrants  will  allow 
shareholders to subscribe to one new MRM share until  December 31, 2013 at the
same issue price  as for  SCOR. Following the  exercise of  the warrants,  the 
current shareholders of MRM may own up to 11.5% of MRM's share capital.

 

Conversion of DB Dynamique Financière bonds into MRM shares

Prior to the  capital increase, an  amendment to the  DB Dynamique  Financière 
bond issuance contract will be submitted to the vote at the general meeting of
DB Dynamique  Financière bondholders,  due to  be  held in  May, in  order  to 
introduce a conversion option allowing each  bondholder to convert his or  her 
bonds into new shares of the company for a period of 15 calendar days from the
date  this  conversion  option   is  introduced.  After  conversion,   current 
bondholders will  hold  32%3  of  the  company's  post-capital  share  capital 
increase.

In order to  ensure the  complete restructuring  of the  bonds, the  following 
changes to the terms of the bonds will also be submitted to bondholders at the
general meeting:

                  i.   extending the maturity of the bonds to December 31,
2050 (including the portion of accrued interest on the bonds between January
1, 2013 and the date of the capital increase); and
                 ii.   reducing the annual interest rate on the bonds to
0.05%.

These provisions shall apply to bonds not converted within the framework of
the conversion offer.

Payment of capitalised interest

Should the share capital increase  be realized, DB Dynamique Financière  shall 
pay to the bondholders the total  amount of capitalised interest on the  bonds 
at December 31, 2012, i.e. the sum  of €8.1 million, no later than 10  working 
days after the date of the  share capital increase. The amount of  capitalised 
interest will be paid by DB  Dynamique Financière to all bondholders,  whether 
or not  they  have  converted their  bonds  into  new MRM  shares  within  the 
framework of the conversion offer.

 

Restructuring of MRM's bank loans

MRM has today announced that it has renegotiated all of its credit facilities
with its partner banks in order to extend significantly the average maturity
of its bank loans^2 and reduce the amount of certain credit facilities.

Subject to the completion of SCOR's investment within MRM, €25.9 million would
be repaid in advance in 2013, while the Company's remaining bank debt would
comprise €26.0 million repayable by the end of 2015, €119.4 million mainly
repayable by the end of 2017 and €10.3 million mainly repayable by the end of
2022. This restructuring would allow for an immediate reduction in MRM's bank
debt of €35.9 million, comprising a debt waiver of €10 million and the early
repayments mentioned above. MRM's consolidated bank debt ratio would therefore
stand at 57.8% on the basis of the value of assets as at December 31, 2012,
compared with 71.2% as at  December 31, 2012. 

 

Management agreements with CBRE Global Investors France

 

With a  view to  the  adoption of  a management  structure  in line  with  the 
Company's new strategy, SCOR wanted  CBRE Global Investors France to  continue 
to manage  the Company's  real estate  assets  with changes  to its  scope  of 
intervention and  compensation.  MRM has  made  an undertaking  to  obtain  an 
agreement  from  CBRE  Global  Investors  France  concerning  changes  to  the 
management agreements signed between MRM  or its subsidiaries and CBRE  Global 
Investors France.

These new management  agreements shall take  effect on the  date of the  share 
capital increase.

 

Governance and strategy

The composition of the Board of Directors  will be amended on the date of  the 
capital increase  so  that  at least  half  of  its members  are  new  members 
appointed  by  SCOR.  The  Board  of  Directors  will  continue  to  have  two 
independent directors.

Jacques Blanchard will stand down  from his role as  Chairman of the Board  of 
Directors but  will continue  to  perform his  duties  as director  and  Chief 
Executive Officer  of  MRM.  The  new Chairman  of  the  Board  of  Directors, 
benefiting from the  casting vote in  pursuance of the  company's Articles  of 
Incorporation, will be  chosen on the  date of the  capital increase from  the 
members appointed by SCOR.

SCOR aims at refocusing MRM's activities on the ownership and management of  a 
portfolio of retail properties, with a view to the gradual sale of the  office 
properties owned by MRM,  some of which currently  contain vacant space.  This 
strategy also  aims at  making the  company more  profitable by  reducing  its 
management costs and with continuing  rigorous asset management, allowing  for 
dividends to be paid as of 2014.

Conditions precedent

SCOR's undertaking to  subscribe to  the capital  increase is  subject to  the 
following conditions precedent being met no later than June 30, 2013:

                  i.   signature of new bank documentation in accordance with
the agreements mentioned above;
                 ii.   exemption granted by the AMF from the requirement to
submit a takeover bid pursuant to Article 234-9-2 of the AMF General
Regulations (share capital increase by a company in proven financial
difficulty, subject to the approval of shareholders at the general meeting of
the shareholders);
                iii.   no material unfavourable change or effect before the
date of the share capital increase;
                iv.   approval of the new bond terms and conditions by the
meeting of DB Dynamique Financière's bondholders;
                 v.   acknowledgment of the conversion of at least 85% of
bonds issued by DB Dynamique Financière into MRM shares;
                vi.   approval by the combined shareholders' meeting of the
draft resolutions needed in order to carry out the capital increase; and
               vii.   amendment of the management agreements with CBRE Global
Investors France.

The combined shareholders' meeting to approve the capital increase is due to
take place in May.

Jacques Blanchard, Chairman and Chief Executive Officer of MRM, comments: "The
investment agreement with SCOR marks the end of a long period of work by MRM's
Board of Directors, under difficult market conditions, in order to be able to
submit to the company's shareholders and bondholders a solution which shall
enable the company to benefit from a sound and durable financial structure. By
involving a majority shareholder of the quality of SCOR, MRM shall refocus its
activities by operating the potential of its retail properties' portfolio".

 

About MRM 

A listed real estate investment company, MRM owns a mixed portfolio of office
and retail properties comprising both stabilised assets and value-added
opportunities worth €269.0 million at the end of December 2012. Its portfolio
has been built up gradually since the second half of 2007 with the
contribution of properties from Dynamique Bureaux and Commerces Rendement, two
investment companies set up and managed by CBRE Global Investors, as well as
acquisitions carried out by its subsidiaries. MRM's real estate operations are
managed by CBRE Global Investors. MRM is listed in Compartment C of Euronext
Paris (Bloomberg code: MRM:FP - Reuters code: MRM.PA).

About SCOR

A top-five global reinsurer, SCOR has a balanced business model, with three
powerful engines: SCOR Global Life (Life reinsurance), SCOR Global P&C
(Non-Life reinsurance) and SCOR Global Investments (asset management). With a
premium income of EUR 9.5 billion in 2012, SCOR continues to reinforce both
its position as a leading global reinsurer and the added value it brings to
its clients. With its teams present in 37 offices, spread across 5 continents,
the Group provides its clients with high added value and innovative,
tailor-made solutions, and commits to working with them on a long-term basis.
SCOR is a multinational group, whose 6-Hub structure (Americas, Cologne,
London, Paris, Singapore and Zurich), in place since 2008, bears witness to
the company's decentralized, multicultural and multinational nature, which is
perfectly suited to the international reinsurance business. SCOR's shares
(ISIN : FR0010411983, code Bloomberg : SCR FP) are publicly traded on the
Eurolist by Euronext Paris stock market and on the SIX Swiss Exchange
(formerly known as the SWX Swiss Exchange). Website : www.scor.com

 

 

For more information: 

 

MRM contacts:

MRM

11, place Edouard VII 

75009 Paris

France            

T +33 (0)1 76 77 67 40

relation_finances@mrminvest.com

 

Isabelle Laurent

DDB Financial

54, rue de Clichy

75009 Paris

France

T +33 (0)1 53 32 61 51

isabelle.laurent@ddbfinancial.fr

 

Website: www.mrminvest.com

 

 

Disclaimer

This announcement is neither an offer to purchase nor the solicitation of an
offer to sell any securities in any country.

No actions have been nor will be undertaken with a view to making a public
offer outside France, in countries where such actions would be required.

The distribution of this announcement in certain jurisdictions may be
restricted by applicable laws and regulations. Persons being in such countries
and where this announcement is being release are required to inform themselves
about, and to observe, any such restriction. MRM shall not be held responsible
for any violation of such restrictions by these persons.

This announcement is neither an offer to purchase nor a solicitation of an
offer to sell any of the securities in the United States. Securities may not
be offered, purchased or sold in the United States without being registered
under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"),
or subject to an exemption from the registration requirements of the
Securities Act. MRM's securities as referenced herein, have not been and are
not intended to be registered under the U.S. Securities Act and MRM is not
planning to make a solicitation of an offer to purchase or sell any securities
in the United States.

This announcement is not an offer to purchase in the United Kingdom. Within
the United Kingdom, this announcement is for distribution only to persons who
(i) are outside the United Kingdom, or (ii) have professional experience in
matters relating to investments ("investment professionals") falling within
Article 19(5) of the Financial Promotion Order, as amended (the'"Order") or
(iii) are high net worth entities falling within Article 49(2)(a) to (d) of
the Order, to whom the Prospectus, when ready, may be communicated (iv) any
other person to whom the Prospectus, when ready, may be communicated
(hereinafter referred to as the "Qualified Persons"). This announcement may
only be communicated to Qualified Persons and no other person may act on the
basis of this press release. Any investment or investment activity referred to
by this announcement may only be carried out by Qualified Persons.

This news release is not being issued in the United States, Canada, Australia
or Japan and it is not for publication or distribution in the United States,
Canada, Australia or Japan.

 

                                  * * * * *

-------------------------

[1]Bonds issued  in 2005  by  DB Dynamique  Financière  - now  a  wholly-owned 
subsidiary of MRM - for a nominal amount of €54 million maturing on   December 
31, 2013 and recognised in the 2012 financial statements for a total amount of
€62.1 million (including €8.1 million corresponding to capitalised interest).

[2] As a reminder, MRM's total bank debt stood at €191.5 million at 31
December 2012, including €60.9 million falling due in 2013. 

[3] On the basis of a conversion into MRM shares of 100% of the bonds issued
by DB Dynamique Financière.

 

MRM Investissement SCOR VA (PDF)

------------------------------------------------------------------------------

This announcement is distributed by Thomson Reuters on behalf of Thomson
Reuters clients.

The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and other
applicable laws; and
(ii) they are solely responsible for the content, accuracy and originality of
the
information contained therein.

Source: MRM via Thomson Reuters ONE
HUG#1683932
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