SCOR has concluded an agreement relating to an investment in MRM, a real estate company subject to the French REIT regime holding a mixed portfolio of retail properties and offices, and the acquisition by SCOR of a controlling stake in the company with a view to refocusing its activity towards a consistent portfolio of retail assets.
The new strategy that SCOR would like to implement for MRM aims to improve the occupancy rate of its assets, to bring the debt ratio back to a reasonable level in order to avoid any liquidity problems in the medium term, and to restore the profitability of the company.
In order to successfully achieve these objectives, the investment programme on the assets kept in the portfolio will be conducted alongside a disposal plan dealing more specifically with office buildings.
SCOR's investment, which takes the form of a cash capital increase of between EUR41m and EUR54m, depending on the conversion rate of MRM bondholders, is accompanied by the deleveraging of the company to achieve a sustainable financial structure negotiated prior to SCOR's entry into the capital of MRM. SCOR will hold a maximum of 59.9 per cent of the capital of MRM upon the consummation of the capital increase.
The transaction will be completed by the end of the second quarter of 2013, subject to the fulfilment of the conditions precedent set out in the agreement. SCOR's investment is in particular subject to the receipt of the exemption provided for in article 234-9 2° of the AMF's General Regulation and the approval of transaction by the general meetings of the MRM shareholders and bondholders.
François de Varenne, chief executive of SCOR Global Investments, says: "As part of its asset allocation policy, and thanks to its strong expertise in terms of real estate asset management, SCOR is strengthening and diversifying its real estate portfolio with this investment, in accordance with the objectives of the strategic plan Strong Momentum. This transaction enables SCOR to take control of a company holding a retail property portfolio, with strong potential for increasing value thanks to the new business plan, and to benefit from the opportunities on the real estate market presented by the current economic and financial climate."