TIDMSPNV
RNS Number : 5651Z
Spazio Investment NV
24 September 2009
Amsterdam, 24 September 2009 - Spazio Investment N.V., ("Spazio" or the
"Company"), a real estate investment company focused on the Italian industrial
real estate market, today reports financial results for the six months ended 30
June 2009.
FINANCIAL HIGHLIGHTS
* Total portfolio OMV (Open Market Value) as at 30 June 2009 of EUR711.0 million
(EUR730.6 million as at 31 December 2008) with an annualised passing rent of EUR42.3
million
* Adjusted1 NAV (Net Asset Value) per share EUR12.3 (EUR13.6 as at 31 December 2008)
* Net Loss for H1 2009 of EUR11.2 million (H1 2008: Net Profit of EUR21.4 million)
* Solid financial position, with a cash balance in excess of EUR60.4 million and
full compliance with all banking covenants
* Completed asset sales in H1 2009 of EUR13.3 million:
* Completed a EUR25 million tender offer in January 2009
* No interim dividend for H1 2009 (H1 2008: Interim dividend of EUR0.59 per share)
1 Adjusted NAV: Investment Properties and Development Projects at OMV
John Duggan, Chairman of Spazio, commented:
"Italy has been less impacted by the global financial turmoil than other
European countries with occupier demand remaining relatively stable. However,
the outlook for the real estate sector remains challenging and we expect a very
cautious approach by investors over the remainder of 2009. Spazio has a strong
portfolio of assets and interest from local investors remains firm. The Board
remains confident that our external manager will be able to deliver the
accelerated business plan and create value for shareholders."
-Ends-
Enquiries
Spazio Investment N.V.
Fabrizio LauroTel: +39 02 6442 50844
Deutsche Bank - Nominated Adviser
Ben LawrenceTel: +44 (0) 20 7545 8000
Oriel Securities - Joint Broker
Richard CrawleyTel: +44 (0) 20 7710 7600
Brunswick Group LLP
Justine McIlroyTel: +44 (0) 20 7404 5959
Roberta Governale
RESULTS FOR THE PERIOD ENDED 30 JUNE 2009
Net loss for the period was EUR11.2 million (H1 2008: Net Profit of EUR21.4 million)
with no income available for distribution.
The decline in H1 2009 net results, compared with H1 2008, reflects the impact
of asset devaluation, lower financial income and lower gains on sales. Rental
income in H1 2009 of EUR21.4 million remained constant with EUR21.4 million of
rental income in H1 2008.
Spazio's Adjusted NAV per share of EUR12.3 fell 9.7% compared to Adjusted NAV of
EUR13.6 as at 31 December 2008. This was primarily driven by the EUR25 million of
capital returned to Shareholders during the January 2009 Tender Offer and by a
further decline in asset values of approximately 1.6%.
DISPOSALS IN THE FIRST HALF OF 2009
Spazio has completed EUR13.3 million of disposals in the period:
* Disposal of 14 Telecom Italia assets located throughout Italy (total GLA of
14,051 sq m) for a total cash consideration of approximately EUR10.0 million, at
an average exit yield of 6.4%, representing a 1.6% discount to OMV as at 31
December 2008;
* Disposal of 4 units of Edificio 16, with a GLA of 1,225 sq m, for a total cash
consideration of approximately EUR2.9 million, representing a premium to book
value of 28.9%;
* Disposal of a unit of the Artisan Building of Eastgate Park for a total cash
consideration of approximately EUR0.4 million, representing a premium to book
value of 13.3%.
In line with Spazio's revised strategy, no acquisitions were made in H1 2009.
UPDATE ON DEVELOPMENT PROJECTS
Spazio has two existing developments, Edificio 16 and Eastgate Park. Following
the announcement of the acceleration of our business plan, Spazio does not
intend to acquire any new development projects beyond the completion of the
projects as described below.
EDIFICIO 16
As at 30 June 2009, total investment in this project was EUR35.9 million, 36 units
had been sold, with a further 1 unit contracted to be sold. We remain confident
that we will sell the remaining units by December 2010.
EASTGATE PARK
As at 30 June 2009 total investment in the Eastgate Project was EUR89.4 million,
with three buildings (industrial, logistic and artisan) with a total GLA of
53,500 sqm completed and infrastructure work approximately 71% complete. First
phase of development is expected to be completed by the end of 2009, with
anticipated costs to completion of EUR6.2 million, at which point remaining
infrastructure work and land movement for the preparation of the urbanised plot
will be completed. Following completion of this first phase of development, the
Board will then consider options for the remaining land at the Eastgate site.
Spazio sold its first unit at Eastgate Park in H1 2009 and we expect to execute
further sales in H2 2009 and 2010.
DIVIDENDS AND RETURN OF CAPITAL
Since its IPO in October 2006, Spazio has delivered EUR110 million of cash to
Shareholders, comprising approximately EUR49 million in dividends and EUR61 million
via share buy back programmes, of which EUR25 million in the form of a public
tender offer in January 2009.
The Board expects the acceleration of the business plan to generate significant
distributable cash to Shareholders over the medium term. The plan remains to
dispose of up to EUR450 million of assets in the three year period ending 31
December 2010 although the Company now anticipates that the disposal process
will be extended by up to 12 months. Further significant disposals of assets
will be targeted in the financial year ending December 2011.
OUTLOOK
The outlook for the real estate sector in general remains challenging. Italy was
less impacted by global financial turmoil than other European countries due to
comparatively low levels of indebtedness and consumer credit, and high saving
ratios. Occupier demand during the last 12 months was relatively stable and
rents have fallen slightly: prime yields have moved out by 50-75 bps over the
last 12 months with a widening spread between prime and secondary yields. The
market balance in the second half of 2009 is expected to shift in favour of
occupiers.
A very cautious approach is expected by investors over the remainder of 2009,
with a focus on quality. International capital flows into Italian Real Estate
are decreasing as the focus is on more liquid real estate markets as these are
seen as lower risk.
The main sources of investment in the Italian real estate market in 2009 are
expected to be private property vehicles and conservative institutions with
pension funds expected to play a more important role. Interest from local
investors remains firm, adopting a 'back to basics' approach to property
investment: less debt, more focus on fundamentals, including stock selection,
property, asset and tenant management.
Nevertheless, the Board is confident that Pirelli RE, its external manager, will
be able to deliver the accelerated business plan and realise value for its
Shareholders over the medium term.
POST PERIOD-END EVENTS
Laxey Partners Tender Offer
On 8 June 2009, the Board of Spazio announced that it had received a firm
intention from an entity controlled by Laxey Partners Limited ("Laxey Partners")
to make an all cash offer at EUR4.50 for the ordinary shares in the Company not
already owned or controlled by Laxey Partners.
On 19 June 2009, Terra European Investments B.V. ("TEI"), an entity established
by Laxey Partners specifically for the purpose of making an offer for Spazio,
posted its Offer Document. Also on 19 June 2009, a Committee of the Independent
Directors (the "Committee"), comprising John Duggan, Roy Dantzic and Richard
Mully, formed to review the offer, announced that it considered that the offer
materially undervalued Spazio and advised shareholders to take no action in
respect of the offer.
On 3 July 2009, the Committee posted a document to Shareholders containing its
formal response to the offer recommending Shareholders to reject the offer. On 6
July 2009, TEI announced that it had increased the offer price from EUR 4.50 per
Spazio Ordinary Share to EUR 5.125. This revised offer was also rejected by the
Committee.
On 13 July 2009, TEI announced that it had received acceptances for its revised
offer in respect of 8,596,732 Spazio Ordinary Shares and that in aggregate Laxey
Partners owned or controlled 15,219,972 Spazio Ordinary Shares representing 66.3
% of the total issued share capital of Spazio. At the same time, TEI declared
its offer unconditional in all respects and announced that, with the support of
other Shareholders able to control more than 75 per cent of Spazio's shares, it
may seek to cancel the admission of Spazio Ordinary Shares to trading on AIM.
On 14 July 2009, the Committee announced that it continued to believe that the
revised offer of EUR 5.125 significantly undervalued the Company but advised
Shareholders to take into consideration the information regarding a possible
cancellation of the admission of Spazio Ordinary Shares on AIM.
On 27 July 2009, TEI announced that it received acceptances from a total of
9,749,986 Spazio Ordinary Shares and that Laxey Partners owned or controlled
16,373,226 Spazio Ordinary Shares representing 71.4 % of the issued share
capital of Spazio and that the offer was closed.
In September 2009 Laxey requested:
* to seek changes to the members of the Board of Directors;
* to potentially de-list the Company;
* to enter into negotiation with Pirelli RE in order to amend the management
contracts.
Other Events
On 9 July 2009, Spazio announced that the 4,535,448 Spazio Ordinary Shares held
in treasury following the share buy back completed by the Company in January
2009 (in the form of a public tender offer) had been cancelled.
Spazio Investment N.V.
Condensed Consolidated Interim Balance Sheet as at 30 June 2009
(in Euro)
+------+--------------------------------------+---------------+---------------+
|Note | ASSETS | 30.06.2009 | 31.12.2008 |
+------+--------------------------------------+---------------+---------------+
| | | | |
+------+--------------------------------------+---------------+---------------+
| | NON-CURRENT ASSETS | | |
+------+--------------------------------------+---------------+---------------+
| 1 | Investment property | 606,620,000 | 626,390,000 |
+------+--------------------------------------+---------------+---------------+
| | | | |
+------+--------------------------------------+---------------+---------------+
| | CURRENT ASSETS | | |
+------+--------------------------------------+---------------+---------------+
| 2 | Inventories | 97,127,422 | 97,010,496 |
+------+--------------------------------------+---------------+---------------+
| | Trade receivables | 2,650,539 | 2,007,725 |
+------+--------------------------------------+---------------+---------------+
| | Other receivables | 416,865 | 466,428 |
+------+--------------------------------------+---------------+---------------+
| 3 | Cash and cash equivalents | 60,442,191 | 79,766,399 |
+------+--------------------------------------+---------------+---------------+
| | | | |
+------+--------------------------------------+---------------+---------------+
| | TOTAL CURRENT ASSETS | 160,637,017 | 179,766,048 |
+------+--------------------------------------+---------------+---------------+
| | | | |
+------+--------------------------------------+---------------+---------------+
| | TOTAL ASSETS | 767,257,017 | 805,641,048 |
+------+--------------------------------------+---------------+---------------+
| | | | |
+------+--------------------------------------+---------------+---------------+
| | EQUITY | | |
+------+--------------------------------------+---------------+---------------+
| 4 | Share capital | 5,498,279 | 5,498,279 |
+------+--------------------------------------+---------------+---------------+
| | Share premium | 274,486,750 | 274,486,750 |
+------+--------------------------------------+---------------+---------------+
| | Retained earnings | 51,586,160 | 87,778,559 |
+------+--------------------------------------+---------------+---------------+
| | | | |
+------+--------------------------------------+---------------+---------------+
| | TOTAL EQUITY | 331,571,189 | 367,763,588 |
+------+--------------------------------------+---------------+---------------+
| | | | |
+------+--------------------------------------+---------------+---------------+
| | LIABILITIES | | |
+------+--------------------------------------+---------------+---------------+
| | | | |
+------+--------------------------------------+---------------+---------------+
| | NON-CURRENT LIABILITIES | | |
+------+--------------------------------------+---------------+---------------+
| 5 | Bank borrowings and payables to | 408,261,161 | 412,887,003 |
| | other financial institutions | | |
+------+--------------------------------------+---------------+---------------+
| | | | |
+------+--------------------------------------+---------------+---------------+
| | CURRENT LIABILITIES | | |
+------+--------------------------------------+---------------+---------------+
| 5 | Bank borrowings and payables to | 220,245 | 115,060 |
| | other financial institutions | | |
+------+--------------------------------------+---------------+---------------+
| | Trade payables | 9,420,416 | 11,691,007 |
+------+--------------------------------------+---------------+---------------+
| | Other payables | 6,281,298 | 5,364,109 |
+------+--------------------------------------+---------------+---------------+
| 6 | Tax payables | 385,244 | 670,488 |
+------+--------------------------------------+---------------+---------------+
| | Derivative financial instruments | 11,117,464 | 7,149,793 |
+------+--------------------------------------+---------------+---------------+
| | | | |
+------+--------------------------------------+---------------+---------------+
| | TOTAL CURRENT LIABILITIES | 27,424,667 | 24,990,457 |
+------+--------------------------------------+---------------+---------------+
| | | | |
+------+--------------------------------------+---------------+---------------+
| | TOTAL LIABILITIES AND EQUITY | 767,257,017 | 805,641,048 |
+------+--------------------------------------+---------------+---------------+
The notes are an integral part of this condensed consolidated interim financial
statements.
Spazio Investment N.V.
Condensed Consolidated Interim Income
statement
for the period from 01 January 2009 to 30 June 2009
(in Euro)
+-------+----------------------------------------------+---------------+--------------+
| Note | | 01.01.2009 | 01.01.2008 |
| | | /30.06.2009 | /30.06.2008 |
+-------+----------------------------------------------+---------------+--------------+
| | | | |
+-------+----------------------------------------------+---------------+--------------+
| 7 | Rental income | 21,369,196 | 21,367,038 |
+-------+----------------------------------------------+---------------+--------------+
| 8 | Net gain from fair value adjustment on | (9,988,239) | 6,103,670 |
| | investment property | | |
+-------+----------------------------------------------+---------------+--------------+
| | Net gain on disposal properties | 55,000 | 2,674,838 |
+-------+----------------------------------------------+---------------+--------------+
| | Net gain on disposal inventories | 693,045 | 1,826,530 |
+-------+----------------------------------------------+---------------+--------------+
| | Other operating income | 736,147 | 174,084 |
+-------+----------------------------------------------+---------------+--------------+
| | Realised and unrealised gain on financial | (3,967,671) | 6,090,614 |
| | assets at fair value through profit and loss | | |
+-------+----------------------------------------------+---------------+--------------+
| | Management fees | (2,613,576) | (2,597,319) |
+-------+----------------------------------------------+---------------+--------------+
| | Other costs | (5,208,862) | (5,500,541) |
+-------+----------------------------------------------+---------------+--------------+
| | | | |
+-------+----------------------------------------------+---------------+--------------+
| | OPERATING PROFIT BEFORE FINANCING COSTS | 1,075,040 | 30,138,914 |
+-------+----------------------------------------------+---------------+--------------+
| | | | |
+-------+----------------------------------------------+---------------+--------------+
| | Financial income | 319,184 | 2,645,543 |
+-------+----------------------------------------------+---------------+--------------+
| | Financial expenses | (12,586,659) | (11,336,760) |
+-------+----------------------------------------------+---------------+--------------+
| | | | |
+-------+----------------------------------------------+---------------+--------------+
| | PROFIT BEFORE TAX | 11,192,435 | 21,447,697 |
+-------+----------------------------------------------+---------------+--------------+
| | | | |
+-------+----------------------------------------------+---------------+--------------+
| 9 | Tax expense | - | - |
+-------+----------------------------------------------+---------------+--------------+
| | | | |
+-------+----------------------------------------------+---------------+--------------+
| | PROFIT FOR THE PERIOD | 11,192,435 | 21,447,697 |
+-------+----------------------------------------------+---------------+--------------+
| | | | |
+-------+----------------------------------------------+---------------+--------------+
| 10 | Basic and diluted earnings per share (Euro) | 0.41 | 0.78 |
+-------+----------------------------------------------+---------------+--------------+
| | | | |
+-------+----------------------------------------------+---------------+--------------+
The notes are an integral part of this condensed consolidated interim financial
statements.
Spazio Investment N.V.
Condensed Consolidated Interim statement
comprehensive income
for the period from 01 January 2009 to 30 June 2009
(in Euro)
+-------+----------------------------------------------+---------------+-------------+
| Note | | 01.01.2009 | 01.01.2008 |
| | | /30.06.2009 |/30.06.2008 |
+-------+----------------------------------------------+---------------+-------------+
| | | | |
+-------+----------------------------------------------+---------------+-------------+
| | Net Income (loss) for the period recognized | (11,192,435) | 21,447,697 |
| | in the income statement | | |
+-------+----------------------------------------------+---------------+-------------+
| | | | |
+-------+----------------------------------------------+---------------+-------------+
| | Total comprehensive income (loss) for the | (11,192,435) | 21,447,697 |
| | period | | |
+-------+----------------------------------------------+---------------+-------------+
| | | | |
+-------+----------------------------------------------+---------------+-------------+
The notes are an integral part of this condensed consolidated interim financial
statements.
Spazio Investment N.V.
Condensed Consolidated Interim Cash Flow Statement
for the period from 01 January 2009 to 30 June 2009
(in Euro)
+------+------------------------------------------------+--+---+--------------+---------------+
|Note | | | 01.01.2009 | 01.01.2008 |
| | | | /30.06.2009 | /30.06.2008 |
+------+------------------------------------------------+--+------------------+---------------+
| | | | | |
+------+------------------------------------------------+--+------------------+---------------+
| | Profit for the period | | (11,192,435) | 21,447,697 |
+------+------------------------------------------------+--+------------------+---------------+
| | | | | |
+------+------------------------------------------------+--+------------------+---------------+
| | Adjustments for non-cash items: | | | |
+------+------------------------------------------------+--+------------------+---------------+
| | - Financial expenses | | 12,586,659 | 11,336,760 |
+------+------------------------------------------------+--+------------------+---------------+
| | - Financial income | | (319,184) | (2,645,543) |
+------+------------------------------------------------+--+------------------+---------------+
| 8 | - Change in fair value of investment property | | 9,988,239 | (6,103,670) |
+------+------------------------------------------------+--+------------------+---------------+
| | - Unrealised gain on assets held for | | 3,967,671 | (6,090,614) |
| | trading/derivatives | | | |
+------+------------------------------------------------+--+------------------+---------------+
| | | | | |
+------+------------------------------------------------+--+------------------+---------------+
| | Changes in working capital: | | | |
+------+------------------------------------------------+--+------------------+---------------+
| | - Change in trade receivables/payables | | (2,913,405) | (1,415,415) |
+------+------------------------------------------------+--+------------------+---------------+
| | - Change in other and tax receivables/payables | | 977,936 | 3,670,947 |
+------+------------------------------------------------+--+------------------+---------------+
| | - Change in other and tax receivables/payables | | (296,428) | 473,654 |
| | (VAT) | | | |
+------+------------------------------------------------+--+------------------+---------------+
| 2 | Investment in inventories | | (2,702,381) | (11,962,578) |
+------+------------------------------------------------+--+------------------+---------------+
| 2 | Disposal in inventories | | 2,585,455 | 6,198,470 |
+------+------------------------------------------------+--+------------------+---------------+
| | | | | |
+------+------------------------------------------------+--+------------------+---------------+
| | Net cash flow generated / (absorbed) from operating | 12,682,127 | 14,909,708 |
| | activities (A) | | |
+------+-------------------------------------------------------+--------------+---------------+
| | | | | |
+------+------------------------------------------------+--+------------------+---------------+
| 1 | Acquisition of investment property | | (138,239) | (62,356,330) |
+------+------------------------------------------------+--+------------------+---------------+
| 1 | Acquisition cost plus additions to properties | | 9,920,000 | 46,190,000 |
| | disposed | | | |
+------+------------------------------------------------+--+------------------+---------------+
| | Interest received | | 514,724 | 2,077,135 |
+------+------------------------------------------------+--+------------------+---------------+
| | | | | |
+------+------------------------------------------------+--+------------------+---------------+
| | Net cash flow generated / (absorbed) from investing | (10,296,485) | (14,089,195) |
| | activities (B) | | |
+------+-------------------------------------------------------+--------------+---------------+
| | | | | |
+------+------------------------------------------------+--+------------------+---------------+
| | Interest paid | | (6,619,825) | (11,729,264) |
+------+------------------------------------------------+--+------------------+---------------+
| | Dividend distribution of the profit | | | (22,224,452) |
+------+------------------------------------------------+--+------------------+---------------+
| | Proceeds of borrowings and payables to banks | | (10,683,031) | 18,407,653 |
| | and other financial institutions | | | |
+------+------------------------------------------------+--+------------------+---------------+
| | Purchase of shares | | (24,999,964) | (668,609) |
+------+------------------------------------------------+--+------------------+---------------+
| | | | | |
+------+------------------------------------------------+--+------------------+---------------+
| | Net cash flow generated / (absorbed) from financing | (42,302,820) | (16,214,672)) |
| | activities (C) | | |
+------+-------------------------------------------------------+--------------+---------------+
| | | | | |
+------+------------------------------------------------+--+------------------+---------------+
| | Total net cash flow generated / (absorbed) in | | (19,324,208) | (15,394,159 |
| | the period (D=A+B+C) | | | |
+------+------------------------------------------------+--+------------------+---------------+
| | | | | |
+------+------------------------------------------------+--+------------------+---------------+
| | Cash and cash equivalents at the beginning of | | 79,766,399 | 103,332,229 |
| | the period (E) | | | |
+------+------------------------------------------------+--+------------------+---------------+
| | | | | |
+------+------------------------------------------------+--+------------------+---------------+
| | Cash and cash equivalents at the end of the | | 60,442,191 | 87,938,070 |
| | period (D+E) | | | |
+------+------------------------------------------------+--+---+--------------+---------------+
The notes are an integral part of this condensed consolidated interim financial
statements.
Spazio Investment N.V.
Condensed Consolidated Interim Statement of Changes in Equity
for the period from 01 January 2009 to 30 June 2009
(in Euro)
+------------------------+------+-----------+-----------+-------+-------+------+--------------+
| |note | Share | Share premium | Retained | Equity |
| | | capital | | earnings | |
+------------------------+------+-----------+-------------------+--------------+--------------+
| | | | | | |
+------------------------+------+-----------+-------------------+--------------+--------------+
| | | | | | |
+------------------------+------+-----------+-------------------+--------------+--------------+
| Equity at 31 December | | 5,498,279 | 274,486,750 | 87,778,559 | 367,763,588 |
| 2008 | | | | | |
+------------------------+------+-----------+-------------------+--------------+--------------+
| | | | | | |
+------------------------+------+-----------+-------------------+--------------+--------------+
| | | | | | |
+------------------------+------+-----------+-------------------+--------------+--------------+
| | | | | | |
+------------------------+------+-----------+-------------------+--------------+--------------+
| Purchase of share | 4 | - | - | (24,999,964) | (24,999,964 |
| capital | | | | | |
+------------------------+------+-----------+-----------+---------------+---------------------+
| | | | | | |
+------------------------+------+-----------+-------------------+--------------+--------------+
| Profit of the period | | - | - | (11,192,435) | (11,192,435) |
+------------------------+------+-----------+-------------------+--------------+--------------+
| | | | | | |
+------------------------+------+-----------+-------------------+--------------+--------------+
| | | | | | |
+------------------------+------+-----------+-------------------+--------------+--------------+
| | | | | | |
+------------------------+------+-----------+-------------------+--------------+--------------+
| Equity at 30 June 2009 | | 5,498,279 | 274,486,750 | 51,586,160 | 331,571,189 |
+------------------------+------+-----------+-------------------+--------------+--------------+
| | | | | | |
+------------------------+------+-----------+-----------+-------+-------+------+--------------+
+------------------------+-----+-----------+--------------+--------------+--------------+
| | | Share | Share | Retained | Equity |
| | | capital | premium | earnings | |
+------------------------+-----+-----------+--------------+--------------+--------------+
| | | | | | |
+------------------------+-----+-----------+--------------+--------------+--------------+
| | | | | | |
+------------------------+-----+-----------+--------------+--------------+--------------+
| Equity at 31 December | | 6,096,020 | 308,956,491 | 100,361,034 | 415,413,545 |
| 2007 | | | | | |
+------------------------+-----+-----------+--------------+--------------+--------------+
| | | | | | |
+------------------------+-----+-----------+--------------+--------------+--------------+
| | | | | | |
+------------------------+-----+-----------+--------------+--------------+--------------+
| | | | | | |
+------------------------+-----+-----------+--------------+--------------+--------------+
| Dividend 2007 | | - | - | (22,224,452) | (22,224,452) |
+------------------------+-----+-----------+--------------+--------------+--------------+
| | | | | | |
+------------------------+-----+-----------+--------------+--------------+--------------+
| Purchase of share | | - | - | (668,609) | (668,609) |
| capital | | | | | |
+------------------------+-----+-----------+--------------+--------------+--------------+
| | | | | | |
+------------------------+-----+-----------+--------------+--------------+--------------+
| Cancelled acquired | | (597,741) | (34,469,741) | 35,067,482 | - |
| shares | | | | | |
+------------------------+-----+-----------+--------------+--------------+--------------+
| | | | | | |
+------------------------+-----+-----------+--------------+--------------+--------------+
| Profit of the period | | - | - | 21,447,697 | 21,447,697 |
+------------------------+-----+-----------+--------------+--------------+--------------+
| | | | | | |
+------------------------+-----+-----------+--------------+--------------+--------------+
| | | | | | |
+------------------------+-----+-----------+--------------+--------------+--------------+
| | | | | | |
+------------------------+-----+-----------+--------------+--------------+--------------+
| Equity at 30 June 2008 | | 5,498,279 | 274,486,750 | 133,983,152 | 413,968,181 |
+------------------------+-----+-----------+--------------+--------------+--------------+
| | | | | | |
+------------------------+-----+-----------+--------------+--------------+--------------+
The retained earnings not distributable amount to EUR 76,544,314 relating to the
revaluation of investment properties and derivatives.
The notes are an integral part of this condensed consolidated interim financial
statements.
Notes to the accounts
Introduction
Spazio Investment N.V. (the "Company", formerly Spazio Industriale Investments I
B.V.), incorporated on 22 November 2005, is a public company (listed at
Alternative Investment Market - London) with limited liability (naamloze
vennootschap) domiciled in Amsterdam, The Netherlands. The address of the
registered office is Royal Damcenter, Dam 7f, 1012 JS Amsterdam, The
Netherlands.
The principal activity of the Company is holding of investments in subsidiaries
and associates.
The Company totally owns the units of the close-end real estate investment fund
"Spazio Industriale - Fondo Comune di Investimento Immobiliare di Tipo Chiuso"
(the "Fund"). The Fund invests in real estate and operates in the development of
land and buildings under renovation.
The reporting on operations of the Company during the first half year 2009 have
been disclosed in the section "Chairman's Statement".
The comparative data in the Condensed consolidated income statement and the cash
flow statements for the period from 1 January 2009 up to 30 June 2009 refer to
the first half year 2008.
Significant Accounting Policies
Except as described below, the accounting policies applied are consistent with
those of the financial statements for the year ended 31 December 2008, as
described in those financial statements.
The following new standards and amendments to standards are mandatory for the
first time for the financial year beginning 1 January 2009.
* IAS 1 (revised) "Presentation of financial statement". The revised standard
prohibits the presentation of items of income and expenses (that is "non-owner
changes in equity") in the statement of changes in equity, requiring "non-owner
changes in equity" to be presented separately from owner changes in equity. All
"non-owner changes in equity" are required to be shown in a performance
statement. Entities can choose whether to present one performance statement (the
statement of comprehensive income) or two statements (the income statement and
statement of comprehensive income) The Company has elected to present two
statements: an income statement and a statement of comprehensive income. The
interim financial statements have been prepared under the revised disclosure
requirements.
* IFRS 8 "Operating segments". IFRS 8 replaces IAS 14. "Segment reporting". It
requires a "management approach" under which segment information is presented on
the same basis as that used for internal reporting purposes. IFRS 8 has no
impact on the Company.
The following new standards amendments to standards and interpretation are
mandatory for the first time for the financial year beginning 1 January 2009,
but are not currently relevant for the Company.
* IAS 23 (amendment) "Borrowing costs".
* IFRS 2 (amendment) "Share-based payment".
* IAS 32 (amendment) "Financial instruments: Presentation".
* IFRIC 13 "Customer loyalty programs".
* IFRIC 15 "Agreement for the construction of real estate".
* IFRIC 16 "Hedges of a net investment in a foreign operation".
* IAS 39 (amendment) "Financial instruments: Recognition and measurement".
* IAS 40 "Investment Property Revised".
Basis of preparation
The condensed consolidated interim financial statements for the half year ended
30 June 2009 have been prepared in accordance with IAS 34, "Interim financial
reporting". This report has not been audited. The interim condensed consolidated
financial statements should be read in conjunction with the annual financial
statements for the year ended 31 December 2008.
The IFRS in force at December 31, 2009 could be different from those used in the
preparation of these Half-yearly financial statements by reason of the future
endorsement by the European Union of new standards, new interpretations and
guidelines issued by IFRIC. The financial statements as at December 31, 2008
could be affected by such changes.
The functional currency is the Euro. All values indicated in the Notes to these
consolidated financial statements are expressed in Euro unless specified
otherwise. All transactions and balance sheet positions are in Euro.
New standards or interpretations
The following new standards, amendments standards and interpretations have been
issued but are not effective for the financial year beginning 1 January 2009 and
have not been early adopted:
* IFRIC 12, 'Service concession arrangements'.
* IFRIC 17, 'Distribution of Non-cash Assets to Owners'.
* IFRIC 18, 'Transfers of Assets from Customers.
* IFRS 3 (amendment), 'Business combinations' and consequential amendments to IAS
27, 'Consolidated and separated financial statements', IAS 28, 'Investments in
associates' and IAS 31, 'Interests in joint ventures', effective prospectively
to business combinations for which the acquisition date is on or after the
beginning of the first annual reporting period beginning on or after 1 July
2009. Management is assessing the impact of the new requirements regarding
acquisition accounting, consolidation and associates on Spazio Investment N.V..
Spazio Investment N.V. does not have any joint ventures.
* Amendments to IAS 39 'Financial Instruments: Recognition and Measurement -
eligible hedged items'.
* Amendments to IFRS 7 'Financial Instruments: disclosures - improving disclosures
about financial instruments'.
* Amendments to IFRIC 9 and IAS 39 - Embedded Derivatives.
* Amendments to IFRS 2 'Share-based payment' that clarify the accounting for group
cash-settled share-based payment transactions.
Segment reporting
The Group has only one line of business ("investments in light industrial
properties") and operates through the Fund exclusively in Italy. Segment
reporting is therefore not required.
Note 1 Investment property
This item totals Euro 606,620,000 (Euro 626,390,000 at 31 December 2008) and is
comprised of:
+-------------------------------------------+-------------+--------------+
| | 01.01.2009 | 01.01.2008 |
| |/30.06.2009 | /31.12.2008 |
+-------------------------------------------+-------------+--------------+
| | EUR | EUR |
+-------------------------------------------+-------------+--------------+
| | | |
+-------------------------------------------+-------------+--------------+
| Balance as at the beginning of the year | 626,390,000 | 619,780,000 |
+-------------------------------------------+-------------+--------------+
| | | |
+-------------------------------------------+-------------+--------------+
| Additions: | | |
+-------------------------------------------+-------------+--------------+
| - Acquisitions | - | 63,920,000 |
+-------------------------------------------+-------------+--------------+
| - Capital expenditure | 138,239 | 3,438,988 |
+-------------------------------------------+-------------+--------------+
| | | |
+-------------------------------------------+-------------+--------------+
| Net gain from fair value adjustments on | (9,988,239) | (11,698,988) |
| investment property | | |
+-------------------------------------------+-------------+--------------+
| | | |
+-------------------------------------------+-------------+--------------+
| - Acquisition cost plus additions to | (9,920,000) | (49,050,000) |
| properties disposed | | |
+-------------------------------------------+-------------+--------------+
| | | |
+-------------------------------------------+-------------+--------------+
| Balance as at the end of the period | 606,620,000 | 626,390,000 |
+-------------------------------------------+-------------+--------------+
The net gain on disposed property of Euro 55,000, as listed in the income
statement, refers to the properties sold during the first half of 2009. The
balance is the difference between the sales proceeds (Euro 9,975,000) and the
carrying amount (Euro 9,920,000).
Please note that in the event the sales prices of the properties included in
irrevocable offers accepted by the Fund are below the market value of same at 30
June 2009, the lesser amount has beenecorded in these Interim Financial
Statements.
Note 2 Inventories
At 30 June 2009 all properties are valued at the lower of cost, including
incremental expenses and capitalisable financial charges, and net realisable
value.
The movement in inventories over the period is shown in the table below:
+--------------------------------------------+-------------+-------------+
| | 01.01.2009 | 01.01.2008 |
| |/30.06.2009 |/31.12.2008 |
+--------------------------------------------+-------------+-------------+
| | EUR | EUR |
+--------------------------------------------+-------------+-------------+
| | | |
+--------------------------------------------+-------------+-------------+
| Balance as at the beginning of the year | 97,010,496 | 89,904,481 |
+--------------------------------------------+-------------+-------------+
| | | |
+--------------------------------------------+-------------+-------------+
| Capitalized costs: | | |
+--------------------------------------------+-------------+-------------+
| - Acquisitions | - | 33,000 |
+--------------------------------------------+-------------+-------------+
| - Capital expenditure | 1,667,426 | 13,866,545 |
+--------------------------------------------+-------------+-------------+
| - Financial expenses | 1,024,955 | 2,711,280 |
+--------------------------------------------+-------------+-------------+
| | | |
+--------------------------------------------+-------------+-------------+
| Total incremental costs in the period | 2,702,381 | 16,610,825 |
+--------------------------------------------+-------------+-------------+
| | | |
+--------------------------------------------+-------------+-------------+
| - Costs of inventory sold | (2,585,455) | (9,504,810) |
+--------------------------------------------+-------------+-------------+
| | | |
+--------------------------------------------+-------------+-------------+
| Balance as at the end of the period | 97,127,422 | 97,010,496 |
+--------------------------------------------+-------------+-------------+
Inventories consist of land for development and buildings under renovation in
the normal course of the Fund's activities or during the construction process,
or development related to said activities. These buildings and land are not
intended for the Fund's investment property portfolio.
During the first half of 2009 a total of 4 sale agreements were made, totalling
Euro 3,278,500, for the disposal of 4 units in the renovated "Edificio 16"
building along with 6 parking spaces (Euro 2,888,500) and for the disposal of a
unit in the Artisan Building in the Portogruaro Area (Euro 390,000).
The net gain on disposal of inventories of Euro 693,045, as listed in the income
statement, refers to the properties sold during the first half of 2009. The
balance is the difference between the sale proceeds (Euro 3,278,500) and the
carrying amount (Euro 2,585,455).
Note 3 Cash and cash equivalents
At 30 June 2009 this item totals Euro 60,442,191 (with respect to Euro
79,766,399 as at 31 December 2008) of which Euro 38,652,760 in restricted
accounts (Euro 39,221,324 as at 31 December 2008), subject to the repayment of
borrowings and interest due
Note 4 Share capital
Share capital is related to the Spazio Investment N.V. shares and amounts to
Euro 5,498,279.
+----------------------------------------+------------+-----------+------------+
| | Ordinary | Preferred | Total |
| | shares | shares | |
+----------------------------------------+------------+-----------+------------+
| | | | |
+----------------------------------------+------------+-----------+------------+
| Balance as at 31 December 2008 | 27,491,295 | 100 | 27,491,395 |
+----------------------------------------+------------+-----------+------------+
| | | | |
+----------------------------------------+------------+-----------+------------+
| Balance as at 30 June 2009 | 27,491,295 | 100 | 27,491,395 |
+----------------------------------------+------------+-----------+------------+
In pursuit of its strategy of returning cash to shareholders, on 15 January 2009
Spazio completed a tender offer for its depository interests. This resulted in
the purchase by the Company of 4,545,448 of its Depository Interests from
tendering shareholders at a price of Euro 5.50 per Depository Interest at a
total cost of approximately Euro 25 m.
The AGM of Shareholders on 28 April 2009 resolved to cancel the 4,545,448 shares
tendered on 15 January 2009. Following the required legal procedures, the
cancellation became effective on the 9 July 2009.
A number of 53,700 of own shares remain in the equity of the Company.
Note 5 Bank borrowings and payables to other financial institutions
This item refers to bank borrowings. The main loan terms, summarised in the
following table, are explained in detail below:
+--------------+---------------+-----------+-------------+--------------+
| | 30.06.2009 | 31.12.2008 |
+--------------+---------------------------+----------------------------+
| EUR | Non-current | Current |Non-current | Current |
| | | | | |
+--------------+---------------+-----------+-------------+--------------+
| | | | | |
+--------------+---------------+-----------+-------------+--------------+
| Jumbo loan | 352,333,026 | 21,113 | 358,923,905 | 38,505 |
+--------------+---------------+-----------+-------------+--------------+
| Portogruaro | 50,543,215 | 3,220 | 47,887,958 | 5,876 |
| loan | | | | |
+--------------+---------------+-----------+-------------+--------------+
| Edificio 16 | 5,384,920 | 288 | 6,075,140 | 641 |
| loan | | | | |
+--------------+---------------+-----------+-------------+--------------+
| Bank | - | 195,624 | - | 70,038 |
| overdraft | | | | |
+--------------+---------------+-----------+-------------+--------------+
| | | | | |
+--------------+---------------+-----------+-------------+--------------+
| Total | 408,261,161 | 220,245 | 412,887,003 | 115,060 |
+--------------+---------------+-----------+-------------+--------------+
The loan movements are presented in this table:
+-------------+----------------+----------+----------------+--------------+--------------+----------------+----------------+
| | 31.12.2008 |Increase | Decrease | Loan | Interest | Interest | 30.06.2009 |
| | | | | arrangement | due | paid | |
+-------------+----------------+----------+----------------+--------------+--------------+----------------+----------------+
| | | | | costs | | | |
+-------------+----------------+----------+----------------+--------------+--------------+----------------+----------------+
| | | | | | | | |
+-------------+----------------+----------+----------------+--------------+--------------+----------------+----------------+
| Jumbo | 358,962,410 | - | (7,810,251) | 1,219,372 | 5,636,379 | (5,653,771) | 352,354,139 |
| Loan | | | | | | | |
+-------------+----------------+----------+----------------+--------------+--------------+----------------+----------------+
| Portogruaro | 47,893,834 | - | (188,889) | 2,844,147 | 873,901 | (876,558) | 50,546,435 |
| Loan | | | | | | | |
+-------------+----------------+----------+----------------+--------------+--------------+----------------+----------------+
| Edificio | 6,075,781 | - | (710,720) | 20,499 | 89,144 | (89,496) | 5,385,208 |
| 16 Loan | | | | | | | |
+-------------+----------------+----------+----------------+--------------+--------------+----------------+----------------+
| | | | | | | | |
+-------------+----------------+----------+----------------+--------------+--------------+----------------+----------------+
| Total | 412,932,025 | - | (8,709,860) | 4,084,018 | 6,599,424 | (6,619,825) | 408,285,782 |
+-------------+----------------+----------+----------------+--------------+--------------+----------------+----------------+
At 30 June 2009, bank borrowings (current and non-current) total Euro
408,285,782 and are broken down as follows:
* Euro 352,354,139 for the property loan ("Jumbo Loan") granted on 18 October 2006
by a syndicate of banks comprising Natixis - Milan branch, Intesa Sanpaolo
S.p.A., Banco di Sicilia S.p.A., MCC S.p.A. and Banca di Roma S.p.A. for Euro
357,956,747 (Euro 322,956,747 of credit facility, Euro 33,500,000 of rollover
credit and Euro 1,500,000 of cash collateral line), stated net of Euro 5,623,721
in loan arrangement costs and Euro 21,113 in accrued interest at 30 June 2009;
* Euro 50,546,435 for the Portogruaro Site ("Portogruaro Loan") granted on 18
October 2006 by a syndicate of banks comprising Natixis - Milan branch, Intesa
Sanpaolo S.p.A., Banco di Sicilia S.p.A., MCC S.p.A. and Banca di Roma S.p.A.
for Euro 14,904,110 (tranche 1), Euro 5,700,417 (tranche 2), Euro 15,433,988
(tranche 3) and Euro 15,134,189 (tranche 5 - cash collateral), stated net of
Euro 629,489 in loan arrangement costs and Euro 3,220 in accrued interest at 30
June 2009;
* Euro 5,385,208 for the property under renovation ("Edificio 16 Loan") granted on
18 October 2006 by a syndicate of banks comprising Natixis - Milan branch,
Intesa Sanpaolo S.p.A., Banco di Sicilia S.p.A., MCC S.p.A. and Banca di Roma
S.p.A. for Euro 5,402,537, stated net of Euro 17,617 in loan arrangement costs
and Euro 288 in accrued interest at 30 June 2009.
Concerning the "Jumbo Loan", during the first half of 2009 Euro 6,150,251 has
been reimbursed as a result of sales and Euro 1,660,000 was used to reimburse
part of the revolving credit.
Concerning the "Portogruaro Loan", during the first half of 2009 Euro 188,889
has been reimbursed as a result of sales.
Concerning the "Edificio 16 Loan", during the first half of 2009 Euro 710,720
was reimbursed as a result of sales.
The Jumbo Loan taken out on 26 September 2006, with a duration of seven years
extendable through ten years, is intended to finance all the Fund's properties
and future acquisitions. It can be drawn down for a maximum total of Euro
530,967,703 (Euro 402,033,831 by way of a credit facility, Euro 118,500,000 by
way of revolving credit for future acquisitions and Euro 10,433,872 to finance
VAT). The interest rate is equal to the three-month Euribor plus a spread that
varies according to the type of credit line used (80 bps for the Facility and
VAT lines, 100 bps for the Revolving line). The effective interest rate,
determined in accordance with the amortised cost method, is 3.280%. This loan is
secured by a mortgage and assignments of receivables relating to insurance
policies, lease agreements and any hedging agreements.
The Portogruaro Loan taken out on 26 September 2006, with a duration of seven
years extendable through ten years, is intended to finance the development of
the Portogruaro Site. It can be drawn down for a maximum total of Euro
226,000,000 (Euro 201,000,000 by way of a credit facility and Euro 25,000,000 to
finance VAT). The interest rate is equal to the three-month Euribor plus a
spread that varies according to the type of credit line used (150 bps for the
Facility line - tranche1, 2 and 3, 80 bps for the Facility line - tranche 4 and
the VAT line, 30 bps for the Facility line - tranche 5 drawn down for cash as a
counterguarantee of a line granted for the issue of sureties to the
municipalities of Portogruaro and Fossalta di Portogruaro for urban development
costs). The effective interest rate, determined in accordance with the amortised
cost method, is 3.202% for tranche 1, 2 and 3, 3.395% for tranche 4 and the VAT
line and 2.433% for tranche 5. This loan is secured by a mortgage and
assignments of receivables relating to insurance policies, lease agreements and
any hedging agreements.
The Edificio 16 Loan taken out on 26 September 2006, with a duration of seven
years extendable through ten years, is intended to finance the purchase of the
property and its subsequent renovation. It can be drawn down for a maximum total
of Euro 27,200,000 (Euro 26,000,000 by way of a credit facility and Euro
1,200,000 to finance VAT). The interest rate is equal to the three-month Euribor
plus 80 bps. The effective interest rate, determined in accordance with the
amortised cost method, is 3.370%. This loan is secured by a mortgage, an
assignment of receivables arising from the sale of the land and a pledge on
current accounts.
During the period under examination the Fund and the Financing Banks concluded
their negotiations regarding several amendments to the original Jumbo Loan
agreement (the "Amendments"). In order to allow for the implementation of said
Amendments, the expiration of the Revolving Facility of Euro 35,160,000 was
extended through 15 June 2009.
The Amendments, put in place after 10 June 2009, are summarized below:
- a roll-over mechanism was introduced that allows the Fund to roll over up
to a maximum of Euro 33,500,000 (the "Roll-
Over Amount") in amounts
drawn against this line without having to repay the Financing Banks beforehand
and to
subsequently reutilise such amounts;
- a rate of Euribor plus 300 bps will be applied to the amounts drawn down as
per the above mentioned "roll-over"
mechanism;
- a commitment fee on the unutilised portions of the "Revolving Facility"
equal to the amount currently provided for
in the Jumbo Loan for
unutilised amounts below Euro 30,000,000 and of approximately 250 bps for larger
amounts
will be applied.
Following the execution of the above mentioned "Amendments" to the "Jumbo Loan"
an up-front fee was paid to the Financing Banks equal to 75 bps of the
"Roll-Over Amount".
While finalising the "Amendments", the Fund also cancelled unutilised
facilities, on which a quarterly commitment fee was paid, as follows:
- a total of Euro 55,000,000 of the "Revolving Facility";
- the total amount of the "VAT Facility Tranche 1" and the "VAT Facility
Tranche 2", equal to Euro 931,004 and Euro
24,068,996 respectively,
which were part of the Euro 226,000,000 "Portogruaro Loan";
- a part of Tranche 4 of "Portogruaro Loan" for a total of Euro 147,500,000.
It should also be noted that the Management Company, in the name of and on
behalf of the Fund, has signed an "Inter-creditor Agreement" on 10 June 2009
along with other financing banks. This is designed to: (i) clarify the
relationships between the Fund, and its various classes of financial
institution, and (ii) regulate the Fund's payment priorities with the different
classes of creditors.
The fair value of the above borrowings approximated their carrying values at the
balance sheet date, since the impact of discounting is not significant. The fair
values are based on cash flows discounted at a rate based on the latest
applicable floating rates at the end of the period.
The Fund confirms that all the financial covenants are in compliance with the
financing contracts as at 30 June 2009.
+-------------+----------------+-------------+-----------+----------------+-----------------+----------------+
| | Bank | Loan | Accrued | Outstanding | Cash | Outstanding |
| | Borrowings |arrangement | | Loan | | Loan |
+-------------+----------------+-------------+-----------+----------------+-----------------+----------------+
| | a) | costs b) |Interests | a+b-c | Collaterals | net of |
| | | | c) | | | Cash |
| | | | | | | Coll. |
+-------------+----------------+-------------+-----------+----------------+-----------------+----------------+
| | | | | | | |
+-------------+----------------+-------------+-----------+----------------+-----------------+----------------+
| Jumbo | 352,354,139 | | 21,113 | 357,956,747 | (1,500,000) | 356,456,747 |
| Loan | | 5,623,721 | | | | |
| (incl. | | * | | | | |
| Rollover) | | | | | | |
+-------------+----------------+-------------+-----------+----------------+-----------------+----------------+
| Portogruaro | 50,546,435 | 629,489 | 3,220 | 51,172,704 | (15,134,189) | 36,038,515 |
| Loan | | | | | | |
+-------------+----------------+-------------+-----------+----------------+-----------------+----------------+
| Edificio | 5,385,208 | 17,617 | 288 | 5,402,537 | - | 5,402,537 |
| 16 Loan | | | | | | |
+-------------+----------------+-------------+-----------+----------------+-----------------+----------------+
| Total | 408,285,782 | 6,270,827 | 24,621 | 414,531,988 | (16,634,189) | 397,897,799 |
+-------------+----------------+-------------+-----------+----------------+-----------------+----------------+
* All "Loan arrangement costs" are included in Jumbo Loan
The covenants of the Fund at 30 June 2009 are in the tables here below:
* LTV covenant: Loan to Value of Jumbo Properties, Area of Portogruaro and
Edificio 16 loans should not exceed 65%
+--+----------------+----------------+----------------+-------+----------+
| | | OMV | Outstanding | LTV | LTV |
| | | | Loan | | |
+--+----------------+----------------+----------------+-------+----------+
| | | | net of Cash | |Covenant |
| | | | Coll. | | |
+--+----------------+----------------+----------------+-------+----------+
| | | | | | |
+--+----------------+----------------+----------------+-------+----------+
| | Jumbo Loan | 600,950,000 | 356,456,747 | 59,3% | 65,0% |
+--+----------------+----------------+----------------+-------+----------+
| | Portogruaro | 85,300,000 | 36,038,515 | 42,2% | 65,0% |
| | Loan | | | | |
+--+----------------+----------------+----------------+-------+----------+
| | Edificio 16 | 17,720,000 | 5,402,537 | 30,5% | 65,0% |
| | Loan | | | | |
+--+----------------+----------------+----------------+-------+----------+
| | | | | | |
+--+----------------+----------------+----------------+-------+----------+
| | | | | | |
+--+----------------+----------------+----------------+-------+----------+
* Global LTV covenant: the aggregate amount of financial indebtedness incurred by
the Fund should not exceed 60% of the OMV of the real estate assets and 20% of
the value of the other assets
+-----------------------+----------------+-----+----------------+--------+-----------+
| | OMV | | Outstanding |Global | Global |
| | | | | | LTV |
+-----------------------+----------------+-----+----------------+--------+-----------+
| | | | Loan | LTV | Covenant |
+-----------------------+----------------+-----+----------------+--------+-----------+
| Jumbo Loan (incl. | 600,950,000 | | 357,956,747 | | |
| Rollover ) | | | | | |
+-----------------------+----------------+-----+----------------+--------+-----------+
| Unlevered Assets | 7,070,000 | (1) | - | | |
+-----------------------+----------------+-----+----------------+--------+-----------+
| Portogruaro Loan | 85,300,000 | | 51,172,704 | | |
+-----------------------+----------------+-----+----------------+--------+-----------+
| Edificio 16 Loan | 17,720,000 | | 5,402,537 | | |
+-----------------------+----------------+-----+----------------+--------+-----------+
| | | | | | |
+-----------------------+----------------+-----+----------------+--------+-----------+
| Total Real Estate | 711,040,000 | (2) | 414,531,988 | 58,3% | 60,0% |
| Assets | | | | | |
+-----------------------+----------------+-----+----------------+--------+-----------+
| Cash & Other Assets | 66,110,320 | (3) | - | 0,0% | 20,0% |
+-----------------------+----------------+-----+----------------+--------+-----------+
| Fund total assets | 777,150,320 | (4) | 414,531,988 | | |
+-----------------------+----------------+-----+----------------+--------+-----------+
| Global LTV Covenant | 733,076,773 | (5) | 414,531,988 | 56,5% | 60,0% |
| figures | | | | | |
+-----------------------+----------------+-----+----------------+--------+-----------+
(1) The unlevered assets are the Agrileasing portfolio and the investment
property in Genova, Via Dino Col.
(2) "Total Real Estate Assets" of Euro 711,040,000 is the total portfolio open
market value as at 30 June 2009.
(3) "Cash & Other Assets" includes Euro 57,859,172 of cash and cash equivalents.
(4) "Fund total assets" of Euro 777,150,320 is the amount of the total assets as
per Bank of Italy financial statements.
(5) The OMV of "Global LTV Covenant" is calculated as the sum of the OMV of the
total Real Estate Assets (Euro 711,040,000) plus one third of the "Cash & Other
Assets" (Euro 66,110,320).
Perspective LTV covenant: in acquiring new assets, the aggregate amount of the
Jumbo Properties loan (Facility line and Revolving line) should not exceed 80%
of the OMV of the properties purchased and owned by the Fund
+------------------+----------------+----------------+--+-------------+-------------+
| | OMV | Outstanding | |Prospective |Prospective |
| | | Loan | | | LTV |
+------------------+----------------+----------------+--+-------------+-------------+
| | | net of Cash | | LTV | Covenant |
| | | Coll. | | | |
+------------------+----------------+----------------+--+-------------+-------------+
| | | | | | |
+------------------+----------------+----------------+--+-------------+-------------+
| Jumbo Loan | 543,540,000 | 322,958,747 | | | |
+------------------+----------------+----------------+--+-------------+-------------+
| Jumbo Loan - | 57,410,000 | 33,500,000 | | | |
| revolving line | | | | | |
+------------------+----------------+----------------+--+-------------+-------------+
| | | | | | |
+------------------+----------------+----------------+--+-------------+-------------+
| Total | 600,950,000 | 356,456,747 | | 59,3% | 80,0% |
+------------------+----------------+----------------+--+-------------+-------------+
* ISCR covenant: the Interest Service Cover Ratio (calculated as the Projected NOI
divided by interest expense and fees) for the entire duration of the Facilities
should not fall below 1.25x
+---------------+--------------+--------------+------------------+---------+
| | 01.10.2008 | Projected | ISCR of the | min |
| | - | | Period | |
+---------------+--------------+--------------+------------------+---------+
| | 31.12.2008 | over 12 | a/(b+c) | ISCR |
| | | months | | |
+---------------+--------------+--------------+------------------+---------+
| | | | | |
+---------------+--------------+--------------+------------------+---------+
| a) Projected | 8,1 | 32,4 | | |
| NOI | | | | |
+---------------+--------------+--------------+------------------+---------+
| b) Interests | 3,7 | 14,6 | | |
+---------------+--------------+--------------+------------------+---------+
| c) Financing | 0,1 | 0,4 | | |
| fees | | | | |
+---------------+--------------+--------------+------------------+---------+
| ISCR Covenant | | | 2.15x | 1.25x |
+---------------+--------------+--------------+------------------+---------+
Note 6 Tax payables
The balance of Euro 385,244 refers to:
* VAT payable in the amount of Euro 373,699;
* withholding taxes due to the authorities on services rendered by the Fund's
consultants, in the amount of Euro 11,545.
Note 7 Rental income
Rental income amounts to Euro 21,369,196, including Euro 10,428,898 from Telecom
Italia S.p.A..
Note 8 Net gain/(loss) from fair value adjustment on investment property
The balance of Euro (9,988,239) is the difference between the fair value of
investment property at 30 June 2009 and 31 December 2008, and between the fair
value of investment property at 30 June 2009 and the related acquisition costs
for investment property acquired during the year.
The fair values are based on open market values, i.e. the estimated amount for
which a property could be exchanged on the date of valuation between a willing
buyer and a willing seller in an arm's length transaction wherein the parties
have acted knowledgeably, prudently and without compulsion.
The fair value losses arise from the determination of market value on 30 June
2009 by an independent, professionally qualified appraiser.
Fair values have been appraised by an external, independent expert (CB Richard
Elis Professional Services S.p.A.) with appropriate recognised professional
qualifications. The fair value valuations are prepared by considering the
aggregate of the net annual rents received from the properties and where
relevant, associated costs. A yield which reflects the specific risks inherent
to the net cash flows is then applied to the net annual rents to arrive at the
property valuation. Valuations reflect, where applicable, the type of tenants
currently occupying the property or responsible for meeting lease commitments,
the allocation of maintenance and insurance responsibilities between lessor and
lessee, and the remaining economic life of the property.
Note 9 Tax expense
Due to the tax-exempt no tax has been calculated for the period.
Note 10 Earnings per share (EPS)
Basic and diluted EPS is calculated by dividing the profit attributable to the
Company's shareholders by the weighted average number of ordinary shares in
issue during the first half of 2009.
+----------------------------------------------------------------+----------------------+
| | 6 months ended |
+----------------------------------------------------------------+----------------------+
| | 30 June 2009 |
+----------------------------------------------------------------+----------------------+
| | |
+----------------------------------------------------------------+----------------------+
| Profit/(Loss) attributable to the Companys shareholders | (11,192) |
| (thousands of Euro) | |
+----------------------------------------------------------------+----------------------+
| Weighted average number of ordinary shares in issue (thousand) | 27,491 |
+----------------------------------------------------------------+----------------------+
| Basic and diluted EPS (Euro per share) | (0.41) |
| | |
+----------------------------------------------------------------+----------------------+
Note 11 Events after the condensed interim financial statements date
On 3 July 2009 a sales agreement was signed with Cozzali Luciano & C. S.n.c. for
a property in Perugia comprised in Telecom portfolio. The property with a gross
floor area of 875 sq.m. was sold for Euro 800,000, and generated a 12,7% capital
gain on its market value at 30 June 2009.
On 6 July 2009 the Fund accepted a binding offer from Advice Real Estate S.r.l.
for a property in Foligno (Pg) comprised in Telecom portfolio. The property with
a gross floor area of 1,897 sq.m. will be sold for Euro 2,130,000, and generated
a 8.2% capital loss on its market value at 30 June 2009.
On 7 July 2009 the Fund accepted a binding offer from Pisco S.p.A. for two
properties in Lazio comprised in Telecom portfolio. The properties with a gross
floor area of 2,660 sq.m. will be sold for Euro 1,720,000, and generated a 10.4%
capital loss on its market value at 30 June 2009.
On 9 July 2009, Spazio announced that the 4,535,448 Spazio Ordinary Shares held
in treasury following the Tender Offer announced by Spazio in January 2009 had
been cancelled.
On 9 July 2009 the Fund accepted a binding offer from MA.TU.RE. S.r.l. for four
properties in Lombardia and a property in Liguria, comprised in Telecom
portfolio. The properties with a gross floor area of 4,540 sq.m. will be sold
for Euro 2,400,000, and generated a 3.6% capital loss on its market value at 30
June 2009.
On 15 July 2009 a sales agreement was signed with Comune di Villongo for a
property in Villongo (Bg) comprised in Telecom portfolio. The property with a
gross floor area of 933 sq.m. was sold for Euro 300,000, and generated a 15.4%
capital gain on its market value at 30 June 2009.
On 20 July 2009 the Fund accepted a binding offer from Florens S.r.l. for a
property in Florence comprised in Enel portfolio. The property with a gross
floor area of 2,281 sq.m. will be sold for Euro 1,370,000, and generated a 5.5%
capital loss on its market value at 30 June 2009.
On 20 July 2009 the Fund accepted a binding offer from Mr. Pietro Gallo for a
property in Grottaglie (Ta) comprised in Telecom portfolio. The property with a
gross floor area of 1,048 sq.m. will be sold for Euro 340,000, and generated a
9.7% capital loss on its market value at 30 June 2009.
On 28 July 2009 the Fund accepted a binding offer from Dafra di Duc Roger & C.
S.n.c. for a property in Donnas (Ao) comprised in Agrileasing portfolio. The
property with a gross floor area of 953 sq.m. will be sold for Euro 350,000, and
generated a 7.9% capital loss on its market value at 30 June 2009.
On 29 July 2009 Lot 178, which is part of the real estate complex in Montevarchi
(Ar) - Prada portfolio, will be transferred to the Municipality of Montevarchi
without consideration as it was part of an agreement stipulated prior to Fund's
purchase of the property. The bank's release from any mortgages or guarantees
resulted in the payment of a release amount equal to Euro 100 (Euro 95.24
related to ALA) which will be used to decrease the debt owed on the property.
On 31 July 2009 a sales agreement was signed with Bianchi Antonio S.p.A. for a
property in Pieve Ligure (Ge) comprised in Telecom portfolio. The property with
a gross floor area of 1,198 sq.m. was sold for Euro 830,000, and generated a
1.2% capital gain on its market value at 30 June 2009.
The total portfolio OMV as per CBRE appraisal has been adjusted downwards for
Euro 1.4 millions in order to reflect the accrued results on assets for which a
binding offer has been accepted by the Fund as described above in this note at
the price lower than the book value of the assets at 30 June 2009.
Note 12 Related party transactions
Balances between the Companies of Pirelli & C. Group and Pirelli & C. Real
Estate Group and the Management Company and companies in the latter's Group at
30 June 2009 and transactions between the same are listed below:
+------------------------------------+-----------------+-----------------+
| | 30.06.2009 | 31.12.2008 |
+------------------------------------+-----------------+-----------------+
| | | |
+------------------------------------+-----------------+-----------------+
| Trade payables to Pirelli & C. | 35,530 | 8,296 |
| Group | | |
+------------------------------------+-----------------+-----------------+
| Trade payables to Pirelli & C. RE | 332,232 | 574,721 |
| Group | | |
+------------------------------------+-----------------+-----------------+
| Trade payables to Management | 1,464,249 | 1,466,519 |
| Company | | |
+------------------------------------+-----------------+-----------------+
| Other payables to Pirelli & C. RE | 1,198,553 | 2,000,000 |
| Group | | |
+------------------------------------+-----------------+-----------------+
+------------------------------------+-----------------+-----------------+
| | 01.01.2009 | 01.01.20008 |
| | /30.06.2009 | /30.06.2008 |
+------------------------------------+-----------------+-----------------+
| | | |
+------------------------------------+-----------------+-----------------+
| Management fees | 2,613,576 | 2,597,319 |
+------------------------------------+-----------------+-----------------+
| Other costs | 788,276 | 2,192,512 |
+------------------------------------+-----------------+-----------------+
Trade payables to Pirelli & C. Group are due to Pirelli & C. Ambiente Site
Remediation S.p.A..
Trade payables to Pirelli & C. RE Group mainly relate to property and agency
management services provided to Pirelli & C. RE Property S.p.A. and Pirelli & C.
RE Agency S.p.A..
Trade payables to Management Company are due to Pirelli RE Netherlands B.V. and
Pirelli & C. RE SGR S.p.A. mainly relate to Company's management fees and Fund's
management fees earned at the reporting date but not yet paid.
Other payables to Pirelli & C. RE Group mainly relate to the payable for the
payment by Progetto Magnolia S.r.l. (formerly Spazio Industriale 2 S.r.l.) into
one of Fund's restricted bank accounts to guarantee this company's environmental
commitments regarding the properties in Portoferraio, Varese and Novara; the
Fund will release the guaranteed amount according to a deal.
Note 13 Dividend 2008
According to Spazio Investment N.V. Articles of Association, the Annual General
Meeting on 28 April 2009 resolved not to pay a final dividend for the financial
year ended 31 December 2008 in addition to Euro 0.59 of interim dividend already
distributed on 6 October 2008 for the previous year.
Note 14 Proposed interim distribution
According to Spazio Investment N.V. Articles of Association, the Management
Board resolves to make no interim distributions.
Note 15 Approval of Interim Accounts
The Interim Accounts were approved by the Board of Directors on 24 September
2008.
Amsterdam, 23 September 2009
Board of Directors
John Duggan
Roy Dantzic
Gualtiero Tamburini
Richard Mully
Nicholas James
Fabrizio Lauro
This information is provided by RNS
The company news service from the London Stock Exchange
END
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