Atrium European Real Estate Ltd. (ATRS), Austria’s largest developer by market value, scrapped a 300 million-euro ($399 million) rights offering for a share sale to Citi Property Investors and Gazit-Globe Ltd. that will be a quarter of the size.
The company will raise 72.1 million euros by selling shares to the two investors, which have already bought 500 million euros of convertible bonds under a plan to recapitalize the Jersey-registered company, announced in March 2008.
Atrium, previously called Meinl European Land Ltd., will use the proceeds of the share placement to buy back a nominal 103 million euros of its own debt, which had been acquired in the market by Gazit.
“The transaction avoids undue dilution of the company’s other shareholders,” Chief Executive Officer Rachel Lavine, who joined in May in a reorganization of the company, said today in a statement.
Efforts to scale back the company’s development pipeline have ensured a “significant reduction” in its need for cash, Atrium said. The company is also looking to sell shopping centers in central and eastern Europe to raise money.
The share sale is due to be completed by the end of January and is a prelude to Atrium switching its shares to the Euronext exchange in Amsterdam by the start of August.
CPI and Gazit’s stake in the company will rise to just below 30 percent, above which they would be obliged under Austrian takeover rules to make an offer to other shareholders. Under the previous rights offer, CPI and Gazit’s stake would have risen to more than 37 percent.
Atrium shares advanced 4 cents, or 1.3 percent, to 3.04 euros at 9:49 a.m. in Vienna trading. That lifted the market value of the company to 659 million euros.
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