VIENNA, Sept 4 Austrian property company Immofinanz on Thursday paved the way to trim its stake in spun-off Buwog by offering bonds worth 375 million euros ($493 million) which it can repay either in cash or in Buwog shares.
Holders of the bonds, which will mature on Sept. 11, 2019, can redeem them in 2017, with Immofinanz having the right to decide at both stages whether it will pay in cash or Buwog shares.
Immofinanz holds 49 percent of Buwog, whose shares will join Austria's blue-chip ATX index later this month.
"This gives us the opportunity to capitalise on part of the Buwog shares," an Immofinanz spokeswoman said.
Shareholders in Immofinanz this year approved a spin-off of an initial 51 percent of Buwog to separate Buwog's portfolio of German and Austrian homes from Immofinanz' eastern European commercial assets.
Immofinanz bought 18,000 German homes for about 892 million euros in February, paving the way for the spin-off. Buwog said this week it sees its biggest growth market in north-western Germany, with property prices high in Berlin and Vienna.
The bonds have an indicated coupon between 0.75 percent and 1.50 percent, Immofinanz said, adding the proceeds would be used to repay existing financing, for portfolio investments and growth opportunities.
The coupon and exchange premium of between 15 and 25 percent over the reference share price will be determined following an accelerated bookbuilding on Thursday, Immofinanz said.
BNP Paribas, JP Morgan and Morgan Stanley are joint bookrunners.
(1 US dollar = 0.7611 euro) (Reporting by Shadia Nasralla and Angelika Gruber; Editing by Mark Potter)