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PARIS, September 16 (Reuters) – The commercial real estate group Unibail-Rodamco-Westfield URW.AS (URW) on Wednesday announced the launch of a plan of at least nine billion euros to strengthen its balance sheet in the face of uncertainties related to the coronavirus pandemic, which continues to weigh on its activities.
This plan provides, among other things, for a capital increase of 3.5 billion euros, fully subscribed by a banking syndicate made up of Bank of America, BNP Paribas, Crédit Agricole, Goldman Sachs, JP Morgan and Société Générale, the proceeds of which will be devoted to debt reduction.
URW also plans to limit dividends paid in cash by one billion over the next two years, a further reduction of 800 million of its investments and disposals totaling four billion by the end of 2021.
“URW’s immediate priority, as announced on July 29, is debt reduction, mainly through asset sales,” CEO Christophe Cuvillier said in a statement.
“But given the uncertainties around the duration of the COVID-19 pandemic and the recovery, we have decided (…) to substantially strengthen our balance sheet in order to maintain a strong investment grade credit rating and ensuring our flexibility in an unpredictable world that requires agility. ”
The group also intends to limit its net debt to less than nine times its gross operating surplus (EBITDA), he said in a press release.
URW, which claims a portfolio valued at 60.4 billion euros as of July 30, operates 89 shopping centers mainly in the United States and Europe, including those at Forum des Halles in Paris and La Part-Dieu in Lyon.
He specifies that all its shopping centers have reopened their doors and that the drop in sales in Europe was reduced to 16% in August compared to 2019 according to still provisional data, after -21% in July and -33% in June.
In the wake of these announcements, Moody’s downgraded the group’s long-term credit rating to Baa1 from A3, explaining that it takes into account the prospect of an increase in debt and the deterioration of the operational outlook for the company and the sector. .
The agency specifies that it expects a drop of around 20% in EBITDA over the next 12 to 18 months compared to 2019.