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Westfield mall owner turns to debt markets after rights issue rejection

11/25/2020 | 09:13am

LONDON (Reuters) - Shopping mall group Unibail-Rodamco-Westfield was set to raise 2 billion euros (1.8 billion pounds) in debt, according to a lead manager on Wednesday, weeks after a proposed 3.5 billion euro rights issue was blocked by shareholders.

The company will raise the money through the issuance of six-year and 11-year debt, and some of the proceeds will partly refinance maturing debt, the lead manager added. Demand was over 7.2 billion euros, he added.

Earlier this month, Unibail's former boss Leon Bressler paired up with French telecoms billionaire Xavier Niel to mount a rebel campaign against URW's planned rights issue and scored a surprise victory in a shareholder vote.

Bressler was subsequently elected to chair the board he left 14 years ago. He said on a conference call on November 10 that the group needed time to reflect on how to tackle its long-term debt problems.

The company also said it would replace its CEO after the rebel investors won their campaign for a radical strategy shift.

Europe's largest shopping mall owner had proposed the rights issue to try and help reduce its 24 billion euro debt, which swelled when it bought Westfield for $16 billion in 2017.

Its ability to service the debt was hurt by the COVID-19 crisis, which has forced the closure of retail outlets throughout Europe at various times this year.

The bond issue is being run concurrently with a tender offer for short-dated debt including bonds maturing in February and May next year. Depending on the take up of the tender offer, this would effectively allow the company to swap the old, short-dated debt for the new longer-dated bonds.

The company's share price hit a five-month high of 64.36 euros per share on Wednesday morning, though was slightly down on the day at 62.38 euros per share at 1350 GMT, valuing the firm at 8.63 billion euros.

Barclays, BNP Paribas, BofA Securities, HSBC, Natixis and RBC Europe are managing the debt issuance.

The company was not immediately available for comment.

(Reporting by Abhinav Ramnarayan; editing by Simon Jessop and Elaine Hardcastle)

By Abhinav Ramnarayan

© Reuters 2021
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