COLONIAL A CONSENTI UNE RESTRUCTURATION DE SA DETTE

NE PAS DIFFUSER AUX ÉTATS-UNIS


Le montant de la dette restructurée s'élève à 7 milliards d'euros sur 5 ans

COLONIAL A CONSENTI UNE RESTRUCTURATION DE SA DETTE

- Grâce à cet accord Colonial se dote d'une stabilité financière et opérationnelle qui jette les fondations d'une nouvelle étape dans le développement de Colonial.

- Colonial renforcera son capital par l'émission d'obligations convertibles qui sera proposée à tous les actionnaires.

- L'accord inclut également une facilité de financement à long terme de maturité 5 ans.

Barcelona, 15 September 2008. Inmobiliaria Colonial has successfully completed the restructuring of its borrowings after finally reaching a formal binding agreement with its syndicated loan's Arranging Banks (Goldman Sachs, Eurohypo, Calyon and Royal Bank of Scotland) and other bank creditors.

This conclusive deal was signed following a non-binding agreement in principle formalised on 31 August, under which consensus was achieved between the syndicated loan's Arrangers.

With this agreement the action plan drawn up by Colonial's new Board of Directors - in place since changes in the shareholder base in H1 2008 - has been concluded successfully. This plan first envisaged a renewal of the Company's management bodies and then a profound effort in respect of transparency and asset writedowns, resulting in a charge of E2.582 billion in Colonial's results at end-H1.

The second phase of this action plan took shape in the restructuring agreement concluded. In the process, the support shown by the real-estate operator's main shareholders has been crucial, as has the confidence the banks have placed in the Company's future.

The refinancing operation covers the syndicated loan and all operating liabilities without collateral, with the total debt refinanced thus exceeding E7 billion.

After formalizing the agreement of the restructuring loan, the Company's president, Juan José Brugera, declared that "the terms of the agreement will permit Colonial to meet three objectives: gain solid financial and operational stability, significantly reinforce the capital structure and center the Company's strategy on its core business, real estate."

According to Brugera, "the new direction of Colonial's management, the quality of its real estate assets, valued at almost 10,500 million euros, and its strong positioning in the office market in Paris, Madrid and Barcelona, have been the foundation on which the financing entities have understood and backed the Group's plans."

Strengthened capital structure

The agreement includes the refinancing of the debt currently held by Colonial with Colonial's current syndicated lenders by its conversion in a long-term financing facility maturing in five years. Other certain bilateral lenders, meanwhile, have agreed to buy some of its non-strategic assets - mainly residential land - to enable repayment of their lending and provide the Company with cash.

By virtue of the refinancing deal, Colonial shall submit a proposed convertible bond issue to its shareholders for adoption in the amount of up to E1.4 billion, with preferential rights and the obligatory conversion into Colonial shares at a fixed conversion rate of E0.25. The proceeds obtained by Colonial through the offering, are expected to be destined primarily to the early amortization of part of the long-term financing facility.

The subscription of this offering is more than 90% guaranteed since the Company's syndicated creditors and certain major shareholders have agreed to subscribe via the partial exchange of their outstandings.

Strategic reorientation with focus on property

Conclusion of the refinancing agreement shall enable Colonial to redirect its core business strategy with a clear focus on property. A central plank in this is for the Group to keep its majority shareholding (51%) in Société Fonciere Lyonnaise (SFL). This is after the planned divestment of 33%, in order to comply with the listed real-estate investment company (Société d'Investissements Immobiliers Cotée) system applicable in France.

The strategic reorientation shall be rounded out by divesting a group of non-strategic assets. These include the financial investment in the form of the 15% shareholding in FCC, as well as Riofisa, the Colonial subsidiary specialised in developing retail centres.

Ushering in a period of operational and financial stability

The restructuring agreement reached, rigorously and transparently adapts Colonial's new capital structure to the new reality of the financial and real estate markets.

The Company intends to combine the financial stability provided by the new debt restructuring with recurrent revenues from its excellent portfolio of strategic assets and the dynamism of new management after recent changes in the shareholder base. The aim of this is to enable greater operational flexibility and allow access to new sources of capital, with which in the near future it should be able to embark on a new phase of corporate development.

Colonial received financial consulting services from Lazard and legal advice from Freshfields Bruckhaus Deringer in its debt restructuring process.

For more informationCommunication

Juan Francés - Tel: + 34 679 962 382

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