CPI’s quest to reduce its overall leverage continues with the announcement of an equity investment of €250 million by Sona Asset Management. The new investor will take a “significant minority” stake in a CPIPG subsidiary holding a €1 billion portfolio of 11 office properties in Warsaw along with two non-Warsaw retail assets. Due diligence is reportedly in an advanced state. “Both parties intend to conclude the transaction with target closing by the end of H1 2024,” according to CPI, which writes that the proceeds will be used to repay debt and reduce leverage.
“Sona will be an excellent partner for CPIPG as we focus on capital structure priorities for 2024 and beyond,” said CPI CEO David Greenbaum. “By investing alongside CPIPG in Poland, Sona will benefit directly from one of CEE’s strongest economies and most vibrant real estate markets.”
CPI recently sold off a string of non-CEE assets as it deleverages. Earlier, it announced plans to sell off a stake in its subsidiary GSG Berlin for €450 million to Apollo Global Management. CPI’s shock takeover of Immofinanz and S-Immo in 2022 helped send its overall indebtedness levels skyrocketing to 52%. This may have inspired the Muddy Waters episode last December. The short seller specialist attacked CPI’s bonds by publishing two ‘reports’ detailing what it called questionable valuations and business practices. But while the company’s bonds temporarily plunged in value, they’ve since recovered and even grown in value.
Besides improving leverage levels, Greenbaum hinted to Bloomberg last week that bringing an investor into its Polish “would show a lot of confidence around our portfolio.” It would also demonstrates the company’s ability to raise funding independent of the fickle bond market. But 40% leverage remains CPI’s goal. “The next €2 billion of disposals is about saving the ratings,” he told Bloomberg.
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