Three international funds and one from Portugal are interested in the 277 real estate being sold by Fidelidade. The insurance company hopes to raise over 400 million euros with the operation.
Fidelidade has put 277 real estate for sale… and already has a short list of four potential buyers. Three foreign funds and one Portuguese fund will now have access to detailed information on the portfolio so that they can present their binding offers, ECO knows. This operation should raise more than 400 million euros for Jorge Magalhães Correia’s insurance company, and will contribute to the reinforcement of their solvency and to the investment in other projects.
The North-American Oaktree Capital Management and Apollo Global Management, the European fun Orion Capital Managers and the Portuguese Coporgest were chosen by Fidelidade to present their final proposals, ECO ascertained. Those who were interested had until November 17 to make a preliminary assessment and present their non-binding purchase offers. On the first stage, there were over a dozen interested entities, but only those four moved on to the short list.
In this operation, Fidelidade is not just analyzing the amount offered by these potential buyers. The insurance company wants to drive away investor who only seek to have access to confidential data on the real estate up for sale. They want to assure the deal is closed with a fund that is already present in the Portuguese market or which has partnerships with real estate agencies.
With this sale — which should be concluded until the end of the first semester –, the insurance company hopes to increase its solvency level to stand between 150% and 160% (due to those 400 million euros), against the current 140%, in order to improve its financing ability. The better the solvency level, the better will be the risk assessment from investors, allowing the company to get financing at lower costs.
More than half (51%) of the assets are located in Lisbon and 12% are located in Oporto. The remaining are spread across the country, including in the Madeira and Azores.
In parallel, the insurance company will also adopt a new real estate investment strategy that focuses on emblematic and larger buildings. Fidelidade is, in addition, building a society to manage real estate assets, in order to further professionalize the management of those assets.