KMC Properties ASA

Share Issue/Capital Change • Sep 29, 2023

KMC Properties - Large property acquisition adds new strategic Nordic institutional investor and lowers overall interest margin

KMC Properties - Large property acquisition adds new strategic Nordic institutional investor and lowers overall interest margin

KMC Properties ASA (“KMC Properties”) has agreed to acquire seven properties from BEWI ASA for NOK 625 million, at a gross yield of 8.75 per cent. The transaction is funded by approximately NOK 290 million in bank debt with an interest margin of 1.25 per cent, NOK 275 million in new equity, and NOK 60 million in available liquidity. The new equity investor, Nordika, is a large and strategic Nordic investor. Following the transaction, the overall interest margin will be reduced to 3.04 per cent, compared to 3.32 per cent at the end of the second quarter 2023.

“We are thrilled to continue our accretive growth, and to bring a new strategic investor on-board. In addition, attractive new bank debt shows that we receive continued support from banks in times of increased macro uncertainty. This is a testament to our strong portfolio and the work laid down over the past years,” says Liv Malvik, CEO of KMC Properties. “The transaction further improves all our KPIs and brings us closer to our vision of becoming the preferred real estate partner for logistic and industrial companies.”

PROPERTY TRANSACTION

The agreed acquisition of seven properties (the “Properties”) represents the last part of the agreement between KMC Properties and BEWI ASA to acquire an industrial real estate portfolio of up to NOK 2 billion. Please refer to the stock exchange announcement made by KMC Properties on 30 June 2022 for further details. In connection with completion of the purchase agreements, long-term triple net rental agreements will be entered into for the properties with a WAULT of 17 years and 100 per cent CPI adjustments (50 per cent CPI adjustment 1 January 2024). The properties are located in Belgium, Germany, and Poland.

“We are very pleased to get the opportunity to complete this transformative real estate transaction with BEWI ASA, significantly growing our portfolio in partnership with our largest and most diversified tenant. Upon completion of the purchase agreements, we will enter long-term agreements bringing our overall WAULT to approximately 11.7 years, reflecting the properties’ importance to our tenants and our long-term perspective as a preferred real estate partner,” Malvik continues.

FINANCING OF TRANSACTION

The transaction will be financed by a new bank loan provided by Nordea Denmark and equity from Nordika, a Swedish unlisted real estate company owned by Nordic pension funds and institutions. The bank loan will be secured against parts of the Danish portfolio which are currently pledged in KMC Properties’ senior secured 23/26 bond. The Danish properties will be sold from the bond portfolio and replaced by the Properties acquired in this transaction.

• Debt: Nordea provides a long-term credit facility of DKK 193 million at 1.25 per cent plus fixed CIBOR, bringing KMC Properties’ overall interest margin from 3.32 per cent at the end of the second quarter 2023 to 3.04 per cent.

• Equity: Nordika subscribing for 50,000,000 new shares (the “New Shares”) at a subscription price of NOK 5.50 per share (the “Private Placement”), representing approx. 12.7 per cent of the shares outstanding in KMC Properties post issuance of the new shares, raising gross proceeds of NOK 275 million.

• Available liquidity: cash on hand, and/or short-term credit facility, and/or new equity.

In addition, provided the Private Placement is completed, Nordika has been granted a call option to subscribe for and be allotted additional new shares in KMC Properties for a total amount of NOK 130 million at a subscription price of NOK 5.75 per share. The call option may be exercised until four months from the time when the New Shares in the Private Placement are delivered to Nordika's VPS account. By exercising the call option, Nordika has the possibility to further increase its ownership in KMC Properties to approx. 17.4 per cent.

“KMC Properties has been on our radar for some time, and we are happy to finally get the opportunity to invest in the company. It is a well operated light industrial and logistics real estate company that provides us with attractive exposure in defensive market segment with several global mega trends supporting the case. The company represents a unique platform for expansion, and we look forward to support KMC Properties in its future growth.” says Jonas Grandér, CEO of Nordika. “We have a long-term perspective when investing in KMC Properties and look forward to the continued good collaboration.”

PRIVATE PLACEMENT AND SHARE CAPITAL INCREASE

In connection with the Private Placement, the board of directors of KMC Properties (the “Board”) has resolved to increase the share capital of the Company with NOK 10,000,000 by the issuance of 50,000,000 new shares, each with a nominal value of NOK 0.2 pursuant to an authorization granted by the annual general meeting on 11 May 2023. Of the New Shares, 40,660,015 will be issued to Nordika on a temporary ISIN blocked from trade pending publication of a listing prospectus for these shares.

The net proceeds from the Private Placement shall be used to the acquisition of the Properties. The Private Placement entails a deviation from the shareholders' pre-emptive rights pursuant to Sections 10-4 and 10-5 of the Norwegian Public Limited Companies Act. The Board has carefully considered whether such deviation from the shareholders' pre-emptive rights is in the best interest of the Company and its shareholders, and the board has concluded that this is the case. The Board inter alia emphasised that the Company by this transaction will secure the equity required to finance the Property Transaction, that the New Shares are issued at a premium to the closing price quoted on the Oslo Stock Exchange on 28 September 2023, that the equity capital market currently is difficult for real estate companies, and that the Company by a share issue directed at Nordika will be getting a new shareholder who may provide both knowledge and additional capital to the Company. The Board also emphasised that the transaction will not imply an unequal treatment of shareholders as Nordika is not a shareholder in the Company, and the transaction is supported by the shareholders represented on the board. The Board also noted that an expansion of the Company's property portfolio through the Property Transaction is in line with the Company's strategy.

The Company will call for an extraordinary general meeting to appoint a board member and a member of the nomination committee nominated by Nordika, and also to resolve a new authorization to the Board to increase the share capital. The calling notice for the extraordinary general meeting will be announced separately in due course.

KMC Properties will continue to work towards its long-term vision of becoming the preferred real estate partner for logistics and industrial companies, and short-term towards its gross asset value target of NOK 8 billion at the end of 2024 based on value accretive transactions.

For further information, please contact:

Liv Malvik, CEO tel. +4748003175

Kristoffer Holmen, CFO tel. +4792814862

Christian Linge, Investment Manager tel. +4746637846

About Nordika

Nordika is an award-winning investor within the Nordic real estate sector. Nordika focuses on special situations and impact investments backed by an excellent investor base of global institutional investors. Nordika invests mainly in commercial real estate in Sweden, Finland, and Norway. Nordika sources investment opportunities across public and private markets and looks to serve as the long-term capital partner of choice. Nordika offers a wide and flexible range of solutions, whether providing control equity, hybrid capital, or bespoke lending solutions to corporates or property owners. Since its inception in 2011, Nordika has acquired and managed investments with a value exceeding SEK 10 billion.

About KMC Properties ASA

KMC Properties is an Oslo Børs-listed real estate company focusing on industrial- and logistic properties. The company has a diversified portfolio of properties in the Nordics and the Netherlands. The properties are strategically located and have long lease agreements with solid tenants.  KMC Properties has an ambitious strategy to grow the portfolio through further development of existing properties, as well as M&A initiatives.  

Information in this announcement is considered inside information pursuant to the EU Market Abuse Regulation (MAR) and is subject to the disclosure requirements pursuant to MAR article 17 and Section 5-12 the Norwegian Securities Trading Act. This announcement was published by Christian Linge of KMC Properties ASA on 29 September 2023 07:45.