DEMIRE: Extraordinary General Meeting 2017 – Optimisation of the Group’s structure to pave the way for significantly higher funds from operations
- Conclusion of four control and profit transfer agreements with Group companies
- Significant positive effect on annual results and cash flows starting in 2018
Langen, 15. November 2017 – The Extraordinary General Meeting of DEMIRE Deutsche Mittelstand Real Estate AG (WKN A0XFSF / ISIN DE000A0XFSF0) today approved all proposed agenda items with significant majorities. With 29.31 percent of the share capital present, the Extraordinary General Meeting took around 50 minutes and ended at 11:50 a.m. The Extraordinary General Meeting dealt with four agenda items, each of which required the approval of control and profit transfer agreements between DEMIRE Deutsche Mittelstand Real Estate AG and Group companies. The shareholders approved the agenda items with large majorities.
At the General Meeting, Markus Drews, Member of the DEMIRE Executive Board, explained the background to the conclusion of the aforementioned agreements: “DEMIRE Deutsche Mittelstand Real Estate AG has high tax loss carryforwards that it has been not yet been able to use optimally due to the company’s lack of a tax-relevant relationship with its subsidiaries. The conclusion of the control and profit transfer agreements and the inflow of positive income from the subsidiaries will now enable these tax loss carryforwards to be utilised at the parent holding company level to reduce taxes.”
This paves the way for a further improvement in overall profitability and higher funds from operations (FFO) starting in the 2018 financial year. Markus Drews added: “Tax optimisation represents another milestone in the implementation of DEMIRE 2.0. This shows that we are consistently implementing the measures planned, particularly in terms of optimising the Group’s internal structures as part of our growth plan.”
Under the name “DEMIRE 2.0”, the company has defined concrete goals as well as an action plan for further growth in addition to cost optimisation, streamlining the Group’s structure and reducing financing costs. A key element is to expand the current real estate portfolio from its current value of around EUR 1 billion to a total of approximately EUR 2 billion. One of the first measures carried out to optimise the financial structure was the placement of a rated, unsecured corporate bond in the amount of EUR 270 million and a coupon of 2.875% in July 2017. In September 2017, this bond was increased by a further EUR 130 million. A portion of the proceeds was used to pay off high-interest financial liabilities. Roughly EUR 35 million of the proceeds is intended to be used for further acquisitions.
Further details about the Extraordinary General Meeting are available on DEMIRE Deutsche Mittelstand Real Estate AG’s website at http://www.demire.ag/en/investor-relations/agm/2017.