November 9, 2016. Investment company O1 Properties and Sberbank CIB, the corporate and investment banking business of Sberbank, announce closing of the transaction whereby O1 Properties buys-back convertible preferred shares of the project company that owns White Square business center, which were acquired by Sberbank CIB as part of a transaction closed in December 2012.
The 2012 transaction whereby O1 Properties acquired White Square business center from a consortium of investors is one of the largest M&A transactions in the Russian office real estate market. As part of that transaction, the Merchant Banking and Advisory Department (MB&A) of Sberbank CIB provided O1 Properties mezzanine financing in the amount of $100 mln to acquire a 33% stake in the project company (that owned White Square business center) in the form of convertible preferred shares. In December 2015, Sberbank CIB sold part of the shares of the project company to O1 Properties and is currently in the process of fully exiting the investment. The funds required to repay the remaining mezzanine debt were received through O1 Properties’ successful Eurobond placement in autumn 2016.
Dmitry Mints, Chairman of the Board of O1 Properties, commented on the transaction: “We thank Sberbank CIB for its cooperation and support in raising the financing for the transaction to purchase White Square business centre. We believe that now is the right time to repay the mezzanine loan, and hope that our work with Sberbank CIB and Sberbank will continue.”
James Corrigan, Managing Director of Sberbank CIB’s Merchant Banking and Advisory Department, commented: “O1 Properties is an excellent partner, and despite the challenging market conditions, our participation in the equity of the project company was a profitable investment for us. Today’s announcement about the successful exit from the investment is proof that White Square was an excellent choice, which we made by signing a deal with O1 Properties, a strong and promising partner which we hope to do more business with. In 2012 this was the first investment deal for Sberbank CIB, and demonstrated that Sberbank is well-positioned to become a major player in merchant banking and direct investment for the Russian real estate sector.”
White Square business center is located next to Belorusskaya metro station and is made up of three A class office buildings that are intersected by a pedestrian area. The complex is BREEAM certified for compliance with environmental standards and has received a number of awards, including from CRE and The Moscow Times. The center’s key tenants are major international corporations.View PDF