Plaza Centers NV (LON: PLAZ) has sold its Riga Plaza complex for 93.4 million Euro leading to a near 23% single day gain in stock prices.
Plaza Centers develops shopping and entertainment complexes in Central & Eastern Europe, and India. The firm concentrates on redeveloping existing centers in regional centers and capitals.
The Latvian property has 50,000 square meters of leasable land making it the second largest complex developed by the firm. Riga Plaza contains shops, restaurants and an entertainment center.
Plaza Centers intends to repay all bank loans on the property after the deal closes. The firm will distribute 75% of net cash proceeds to their bondholders.
Plaza Centers has a market cap of 14.85 million GBP and previous to the sale had negative earnings. Including Riga Plaza the firm owns six major shopping centers across the world.
The firm is aggressively taking control of their debt, finalizing a 4.7 million Euro land sale in Greece. The firm was unable to develop their 2009 purchase near Athens due to market conditions. In March Plaza also announced plans to sell their Liberec complex in the Czech Republic for 9.5 million Euro and Romanian complex for 0.66 million Euro.
Analysts expect the firm’s upward trend to continue with some predicting an increased company value of 23.13 million GBP following the consolidation.
The sale is in line with the firm’s strategy to retain more “resilient and higher quality income-producing properties”. Riga’s sale is also intended to reduce the company’s debt allowing them to complete existing projects. The company is looking to expand further into emerging markets with their sights set on Serbia and Romania next.
