Stockland talks with FKP continue
Stockland is yet to make a formal offer to take a share in FKP Property Group following an exclusive two-month period of due diligence, citing a need for further analysis of the potential investment.
Stockland, a diversified property group, was granted exclusivity and a first right of refusal in relation to FKP’s retirement assets in an agreement that expired on December 15.
FKP established its relationship with Stockland in an initiative to strengthen its capital position while undertaking a strategic review. The group has agreed to continue working with Stockland in order to determine whether an agreement can be reached that would be in the best interests of FKP security holders.
FKP said in a statement that while the transaction “may be desirable, it is not essential to the financial stability of FKP”.
Stockland, which has undertaken a review of its business operations and asset carrying values, reported asset sales of $211.1 million in commercial property since June 30 this year, including shopping centres and parks. The group has also conditionally pre-sold its Edmund Barton Building in Canberra for $186 million.
Stockland said these sales demonstrate its “commitment to actively manage its portfolio and prudently allocate capital, with the proceeds being used to pay down debt”.
The group is also reviewing its development pipeline and has said a number of projects are expected to be deferred because of the “higher cost and scarcity of capital”.
Standstill provisions in the subscription agreement between Stockland and FKP have been lifted by one month in light of the ongoing discussions between the groups.
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