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LONDON (Alliance News) - Plaza Centers NV on Monday said it has sold its Riga Plaza shopping and entertainment centre to an unnamed global investment fund for EUR93.4 million, in line with its strategy to refocus the portfolio towards more "resilient and higher quality income-producing properties".
The emerging markets property developer said the property in Riga, Latvia, which comprised of 50,0000 square metres of gross leasable area, had been owned by its subsidiary, in which it holds at 50% stake. The property was the second largest shopping centre to have been developed by Plaza Centers, the company said.
Plaza Centers said 75% of the net cash proceeds from its share of the sale will be distributed to its bondholders within the quarter, after the repayment of its bank loan and following closure of the deal.
The sale of the property is subject to several conditions, Plaza Centers said, all of which are "expected to be fulfilled in the coming months".
Plaza Centers added that the sale was consistent with its strategy to reduce its debt levels and bring its development projects to fruition by selling non-core or mature assets.
"Despite the very challenging timing of the development and opening phase of Riga Plaza in 2007 to 2009, during the course of the significant global economic downturn, which had a significant impact on the Latvian market, Riga Plaza has been a success story for Plaza over the last number of years, having been turned into the dominant fashion oriented shopping and entertainment centre that it is today," said Plaza Centers Acting Chief Executive Dori Keren.
"The transaction represents another solid step forward in our strategy implementation and the ongoing disposal programme, as we seek to meet the commitments of our restructuring plan and refocus the portfolio towards more resilient and higher quality income-producing properties, especially in Serbia and Romania," Keren added.
Shares in Plaza Centers were up 10% at 3.03 pence on Monday.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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