Arcandor AG
Karstadt Quelle AG: KarstadtQuelle examines disposal of real estate
Ad hoc announcement transmitted by DGAP.
The issuer is solely responsible for the content of this announcement.
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KarstadtQuelle examines disposal of real estate – Group financing to be
strengthened considerably
Essen, December 8, 2005. KarstadtQuelle AG has successfully concluded its 2005
restructuring, at the same time taking realignment measures. This has created
conditions for a sustained optimization of the equity ratio, with the long-
term soundness of Group financing being further strengthened.
The Group Management Board is currently examining intensively all options for
deploying the assets and the potential of its real estate more forcefully.
These options include a complete or partial disposal of the real estate, as
well as a spin-off in the form of an IPO. GoldmanSachs International has been
mandated with structuring this process.
Independently of this, the Group will considerably increase its financing
scope for restructuring and developing growth segments.
To do this a new EUR 300 million subordinate secured syndicated loan (second
lien) will be issued at normal market conditions. With the placement
attracting great interest in the market, negotiations are to be concluded
shortly. The lender will be an international investor consortium. The
transaction is structured by Goldman Sachs International and Barclays Capital.
The new loan will have a maturity of 48 months. The consortium of the
previous lending banks headed by Bayerische Landesbank approved marketing this
additional financing and an alignment of the covenants of the syndicated bank
loan for EUR 1.75 billion. This long-term financing remains available without
change to volume and duration.
The Group has concluded its original disinvestment program as scheduled. The
remaining part, a parcel with numerous logistic properties has now been sold
to international investors, with some of the properties being leased back. As
a result of the Group’s recently improved financing structure, the option of
directly selling the property of the Neckermann headquarters in Frankfurt,
also part of the parcel, was not exercised. Instead, the external pension fund
of the KarstadtQuelle Group (CTA) participated in the property. The entire
transaction volume of the Logistics parcel exceeds EUR 400 million.
Furthermore, the KarstadtQuelle Group is to conclude parts of the additional
disinvestment program announced in the summer of 2005 earlier than scheduled.
In this context, the receivables from the German credit instalment business of
the Quelle and Neckermann Mail Order companies previously sold in the
framework of an asset-backed securitization program (ABS) are to be completely
restructured and the business operated by Karstadt Hypothekenbank AG (KHB).
Furthermore, KHB is to expand its activities in the area of consumer finance.
The conditions of the ABS financing will thus improve significantly within the
framework of the long-term financing for the KarstadtQuelle Group. At the
same time, the assets of the external pension fund (CTA) are to be
strengthened by Karstadt Hypothekenbank being transferred to the CTA program
against the participation in Quelle Neckermann Versand Finanz GmbH & Co. KG.
For the KarstadtQuelle Group this results in key advantages: a considerable
improvement in the structure of the Group balance sheet and a reduction of net
financial debt by approximately EUR 1 billion.
Taking into account the above measures, the net financial debt in the
KarstadtQuelle Group will be reduced considerably more strongly than
previously scheduled. To the end of 2005, they are expected to be less than
EUR 2.8 billion. The disposal of the Group real estate would result in a
reduction of Group debt towards zero in 2006.
Essen, December 8, 2005
The Management Board
KARSTADT QUELLE AG
Theodor-Althoff-Straße 2
45133 Essen
Deutschland
ISIN: DE0006275001 (MDAX)
WKN: 627500
Listed: Amtlicher Markt in Berlin-Bremen, Düsseldorf, Frankfurt (Prime
Standard), Hamburg, Hannover, München und Stuttgart
End of ad hoc announcement (c)DGAP 08.12.2005
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