27 February 2018 – Eje Prime
Lone Star is reordering its management team across Europe, including in Spain. Following the departure from the fund of one of its strong men, Juan Pepa, the company has appointed Mark Coker to lead its business in the old continent (Europe). Mr Coker, a former director of Hudson Advisors and Vinson and Elkins, is now going to take over the role of CEO for Lone Star in Europe.
Despite this change in its leadership, Lone Star is nevertheless pushing ahead to close operations that it had open in the Spanish market, and is also undoing positions in the real estate business in the country. Those include the sale of the last major asset of Project Octopus, a portfolio comprising more than €4 billion in real estate loans from Eurohypo in Spain and Portugal, which the US fund acquired together with JP Morgan three years ago.
Also, at the end of last year, the fund sold the former headquarters of Fecsa-Endesa in Cataluña, a building measuring 35,000 m2, whose three chimneys form part of Barcelona’s skyline and regarding which it is negotiating exclusively with the Tramway group and the German vehicle Indigo Capital.
That property has been empty for five years and has both environmental and change of use problems, which have conditioned its sale. Constructed on the site of a former coal generation plant dating back to the beginning of the twentieth century, it may be converted into an office building in the short term and could attract attention from coworking giants or large groups looking to set up their headquarters in Barcelona, according to sources in the sector.
But the move that caught the most attention in the real estate sector was Lone Star’s exit from the share capital of Neinor Homes following that firm’s debut on the stock market. The US fund completed the accelerated placement amongst institutional investors of 9.85 million shares in Neinor Homes in January, representing 12.5% of its share capital and worth €174 million.
After concluding that operation, Lone Star’s presence in Neinor Homes, a company that it had controlled in its entirety prior to its stock market debut, was reduced to a token 0.4% or 350,918 shares in total, which it held onto in order to agree the terms and conditions of the incentive plan for “certain directors and key employees”.
In practice, this sale represented the exit of Lone Star from the real estate developer that it had constituted just three years ago, in 2015, with assets purchased from Kutxabank. The divestment was completed before Neinor had the chance to celebrate its one year anniversary as a listed company, after it made its stock market debut at the end of March 2017.
Original story: Eje Prime
Translation: Carmel Drake
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