Colonial's shareholders approved a capital increase at the Extraordinary General Meeting with 98.74% of votes in favour. The proposal, unanimously supported by the Board of Directors, seeks to accelerate the company's value creation plans through cash and asset contributions made by CriteriaCaixa.
With this transaction, CriteriaCaixa increases its stake to become one of the main reference shareholders of Colonial, together with Qatar Investment Authority, Finaccess, Puig, and Santo Domingo, with stakes of 17%, 16%, 13%, 7% and 6%, respectively.
The capital increase, fully subscribed by CriteriaCaixa, amounts to a nominal amount of 219.3 million euros, through the issue of 87.8 million new ordinary shares with a par value of 2.5 euros each. In addition, a share premium of 4.5954 euros per share is included, bringing the total effective amount to 622,473,000 euros. This sum includes cash contributions of 350 million euros and the contribution of eight office and residential properties in Spain valued at 272.4 million euros, according to valuation as at 31 December 2023.
The properties contributed by CriteriaCaixa, from the portfolio of its subsidiary InmoCaixa, include three office buildings in Madrid and Barcelona with more than 20,000 square metres, as well as five residential buildings for lease. These assets are aligned with Colonial's urban regeneration strategy and will immediately contribute to the company's cash flow.
"With this transaction we create value for our shareholders and at the same time strengthen our capital structure and financial flexibility, including the reduction of leverage", said Pere Viñolas, CEO of Colonial.
Juan José Brugera, Chairman of Colonial, added: "The incorporation of CriteriaCaixa as a reference shareholder adds an institutional investor with a long-term vision that allows us to drive value generation through new investment projects and joins the rest of our reference shareholders".
Structure for investors
The capital increase will also allow Colonial to develop a new set of projects under the Alpha X project, with an expected investment of 385 million euros in Capex. This initiative includes the transformation of four assets in Paris, Madrid and Barcelona, which will generate additional annual rents of 64 million euros and is expected to contribute an estimated additional value of between 400 and 600 million euros.
In Paris, it will promote two projects: it will develop a business campus in Scope, in the second largest office area in the French capital, while in Condorcet it plans a mixed-use development. In Madrid, it is also planning a mixed-use project for Santa Hortensia, while in Barcelona it will promote the conversion of an office building in Sancho de Ávila, in the 22@ district, into a Health Sciences facility. These actions are scheduled until 2028 and are in line with the strategy of repositioning assets linked to urban regeneration.
Profitability and new advisors
In addition, this strategy will allow Colonial to reduce its LTV debt ratio from 39.9% to 36.2%, increasing its capacity to capture new opportunities and take advantage of the recovery of the real estate cycle in Europe. The company's market capitalisation value is also expected to increase by more than 600 million euros and the projections for 2024 of earnings per share between €30 and €32 Cts are maintained.
At the same meeting, the Board of Directors was enlarged to 14 members with the addition of two proprietary directors proposed by CriteriaCaixa: Elena Salgado and Felipe Matías Caviedes. The appointment of these directors, for a term of four years, will be effective from the registration of the share capital increase. The Board of Directors has a maximum of 15 working days to execute the resolution to increase the share capital.
