LONDON (Alliance News) - Globalworth Real Estate Investments Ltd Tuesday said it has taken out a EUR55 million short-term secured debt facility which it will use to fund the equity portion of the consideration of two buildings it has bought in Bucharest, and is confident that it will soon conclude talks on further long-term finance.
The real estate investor said it has now closed its previously-announced acquisition of the Unicredit Building in Bucharest for about EUR43 million and the Nusco Tower in the same city for about EUR46 million. It expects the Unicredit Building to add about EUR3.8 million to its net operating income and the Nusco Tower to add about EUR4.3 million.
It will fund the equity portion of these acquisitions, about EUR35 million in total, using the new facility which has been provided by subsidiaries of funds managed by Oak Hill Advisors LP and York Capital Management Global Advisors LLC. The facility can also be used for general corporate purposes including funding ongoing development projects.
"The directors believe that the company will be able to conclude negotiations in the near term in relation to raising further long term finance which, amongst other things, will be used to repay the facility and fund the company's ongoing development projects, operating costs and currently uncompleted and future potential acquisitions," Globalworth said.
Oak Hill has subscribed for EUR36.7 million of the facility and York has subscribed for EUR18.3 million.
The total financing cost of the facility is expected to be between about EUR5 million and about EUR8 million depending on when it's repaid, the company said. It's for a maximum of 12 months, and the financing cost would rise to about EUR10 million if it's outstanding for the full term.
Globalworth Real Estate shares were down 0.8% at 5.95 pence Tuesday afternoon.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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Globalworth (GWI)