Gagfah Climbs as Dresden City Settlement Ends Two Lawsuits: Berlin Mover
Gagfah rose 27 percent to 5.54 euros at the 5:30 p.m. close. The Luxembourg-based company agreed to pay Dresden 36 million euros ($47 million) through 2020 relating to Gagfah’s WOBA Dresden unit. The accord will make it easier for Gagfah to refinance its debt, Commerzbank AG analyst Thomas Rothaeusler said in a note to investors today.
“We see at least a chance for a partial refinancing or extension of major loans, which would also be a positive trigger,” Rothaeusler said. The Frankfurt-based analyst raised his rating on the stock to “buy” from “hold” after the announcement, which was made after the market closed on Friday.
Most of Gagfah’s debt is due to be refinanced in 2013. Dresden sued the company for 1.08 billion euros in April, claiming it broke a sales agreement. Gagfah filed a countersuit over the claim in June.
Gagfah has climbed 44 percent in the past six months, while the DAX Mid-Cap Index (MDAX) has added 23 percent. The company has a market value of about 1.23 billion euros.
Dresden’s city council will vote on the agreement at a meeting on March 15.
Gagfah owns about 155,000 apartments across Germany, according to its website. Fortress Investment Group LLC (FIG) acquired the WOBA unit in 2006 for 1.75 billion euros and transferred the company to Gagfah, its holding company at the time that later sold shares to the public.
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