January 23, 2013 / 10:55 AM / in 5 years

Gagfah scraps unit sale after getting new loan - sources

FRANKFURT, Jan 23 (Reuters) - German real estate group Gagfah has called off the sale of its Woba unit after securing a 1 billion euro ($1.3 billion) loan from Bank of America Merrill Lynch, two people close to the transaction told Reuters.

The unit comprises 38,000 flats located in the eastern German city of Dresden and makes up a quarter of the portfolio of Gagfah, owned by private equity investor Fortress.

Gagfah had put Woba on the block after running into difficulties refinancing a 1 billion euro loan of Woba maturing in May.

Bidders included peer Deutsche Wohnen but none offered more than 1.6 billion euros, a price Gagfah was unwilling to accept, the sources said on Wednesday.

The refinancing - expected to be finalised and announced in the next couple of days - made the sales plan redundant, they said.

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