Atrium European Real Estate Limited

EANS-Adhoc: Atrium European Real Estate Limited
DEBT REPURCHASE, EQUITY ISSUANCE, CORPORATE GOVERNANCE MEASURES AND NEW DIVIDEND POLICY

@@start.t1@@--------------------------------------------------------------------------------   ad-hoc disclosure transmitted by euro adhoc with the aim of a Europe-wide   distribution. The issuer is solely responsible for the content of this   announcement. --------------------------------------------------------------------------------@@end@@

03.09.2009

DEBT REPURCHASE, EQUITY ISSUANCE, CORPORATE GOVERNANCE MEASURES AND
NEW                                                        DIVIDEND POLICY      Jersey, 3
September 2009: Atrium European Real Estate Limited ("Atrium" or      
the "Company") (Euronext / ATX: ATRS), a leading real estate company
focused      on shopping centre investment, management and development
in Central and      Eastern Europe, announces the proposals described
in this announcement      (together, the "Proposals") to strengthen its
balance sheet, reduce its debt,      increase its equity and improve
its corporate governance consistent with its      previously stated and
on-going strategy. The Proposals require the approval      of certain
resolutions by shareholders at an extraordinary general meeting      
("EGM").

Atrium has agreed with Citi Property Investors ("CPI") and Gazit
Globe      Limited ("Gazit" and, together with CPI, the "Investors"),
to exchange in      aggregate 144,853,705 new ordinary shares of the
Company and approximately      EUR9.3 million in cash for the
following:

@@start.t2@@. all the Investors' and their affiliates' 10.75% subordinated convertible
         securities (the "Convertible Bonds");

      . all the Investors' and their affiliates' warrants to subscribe for
         ordinary shares (the "Warrants");

      . the removal and/or reduction of certain significant rights held by the
         Investors under the relationship agreement (the "Relationship Agreement")
         entered into at the time of the Investors' original investment and
         approved by shareholders on 16 July 2008 (for details see annex attached);
         and

      . the special voting shares issued to the Investors in connection with the
         issue of Convertible Bonds (the "Special Voting Shares") (together, the
         "Exchange Transaction").@@end@@

Following closing of the Exchange Transaction, Atrium proposes to:

@@start.t3@@. make a partial tender offer for the listed Notes issued under the
         Company's 2006 guaranteed medium term programme (the "2006 Notes") at 95%
         up to a maximum amount of EUR120 million in nominal value of the 2006
         notes;

      . pay a special dividend of EUR0.50 per ordinary share (the "Special
         Dividend"); and

      . commence a dividend policy of EUR0.12 per ordinary share per year, payable
         in quarterly instalments.@@end@@

The board has approved the Proposals on the unanimous recommendation
of a      committee comprising the Company's independent directors,
chaired by Dr Peter      Linneman and advised by Kempen & Co Corporate
Finance B.V.  Directors      appointed by the Investors did not
participate in the vote of the board      approving the Proposals.

The Company will shortly publish a circular including a notice to
convene the      EGM to allow shareholders to vote on the required
resolutions.

The Investors, who currently hold in aggregate 29.7% of the voting
rights of      the Company, have committed to vote in favour of the
resolutions. On closing      of the Exchange Transaction, the Investors
will in aggregate own 48.6% of the      Company's issued ordinary
shares, carrying 48.6% of the voting rights in the      Company.

The board believes that the benefits to the Company and its
shareholders of      the Proposals include the following:

@@start.t4@@. a total saving of EUR176 million from 1 October 2009 or EUR46 million per
         year, equivalent to EUR0.12 per ordinary share per year (assuming
         372,052,992 ordinary shares in issue), in future interest payments on the
         Convertible Bonds until August 2013 when the Convertible Bonds would
         otherwise first become redeemable. This saving would increase to a total
         of EUR268 million if the Convertible Bonds were held to maturity in August
         2015;

      . a total saving of EUR29.3 million or EUR7.7 million per year from 1
         October 2009 to maturity, equivalent to EUR0.02 per ordinary share per
         year (assuming 372,052,992 ordinary shares in issue), in future interest
         payments on the 2006 Notes until maturity in August 2013, assuming the
         partial tender is accepted in full;

      . a reduction in the Company's average borrowing rate of interest from 7.62%
         to 5.65%, following the exchange of the Convertible Bonds, and to 5.49%,
         assuming the partial tender is accepted in full;

      . an improvement in the Company's cash flow which will allow immediate and
         future cash returns through the payment of the Special Dividend and future
         dividends to all shareholders;

      . a stronger and more efficient balance sheet with significantly decreased
         leverage;

      . a reduction of leverage that will create room for Atrium to raise new
         financing on more attractive terms;

      . a large increase in equity value, resulting in the stronger alignment of
         the Investors' interests, given their increased equity stake, with those
         of the Company's other shareholders; and

      . an improved corporate governance structure, more autonomy for the board
         and a clear mechanism for the reduction of the number of seats the
         Investors have on the Company's board in relation to their shareholding,
         coupled with an agreement to cancel all terms of the Relationship
         Agreement, should the Investors' shareholding fall below 20,000,000
         shares.@@end@@

Shareholder approval is required for resolutions to make Atrium a no
par      value company, to facilitate the issuance of the new ordinary
shares and to      make certain changes to the Company's articles of
association ("Articles"),      including in relation to the rights of
the Investors to appoint directors and      to facilitate payment of
the Special Dividend and implementation of the      proposed on-going
dividend policy. Closing of the Exchange Transaction is      also
subject to the obtaining of applicable anti-trust clearances.

The Company expects that, subject to obtaining the relevant
shareholder      approvals and applicable anti-trust clearances, the
Exchange Transaction will      close by year end.

Further details of all these actions are set out below.

Rachel Lavine, chief executive officer of the Company, commented
today:  "We      have been actively looking at ways to strengthen our
balance sheet through      the reduction of the Company's debt, enhance
the Company's cash flow and      improve Atrium's corporate governance
structure.

"The 2008 10.75% convertible bonds and related arrangements are key
issues      which need to be addressed, particularly given our reduced
capital      expenditure requirements in the current financial
environment.  I therefore      view the fact that we have been able to
reach agreement with the Investors to      buy in this debt and rework
the Relationship Agreement in favour of the      Company as very
positive for Atrium, especially when combined with the other      
actions and transactions we are announcing today.  We expect the
Proposals to      put us in a strong position to take advantage of
acquisition opportunities by      utilising our cash and/or by raising
debt which is both cheaper and less      restrictive.  We believe it is
a further clear demonstration of how we are      creating a solid
platform for future growth."

Peter Linneman, chairman of the committee of independent directors
which      recommended the Proposals, added:  "The Proposals we are
announcing today      provide a number of significant benefits for the
Company. Our interest burden      will be reduced significantly and our
corporate governance structure      improved.  Importantly, they will
also mean that the interests of the      Investors are fully aligned
with all other shareholders, as they will now be      major holders of
the Company's equity rather than its debt."

"I expect there to be a number of significant benefits for the
Company as a      result of the Proposals which include putting the
Company in a position to      implement an on-going dividend policy and
pay the Special Dividend,      underlining our commitment to delivering
real value for shareholders.  I am      of the firm belief that the
package we have announced today is another      significant step
forward for the Company and we feel encouraged by the      significant
equity increase the Investors will make."

Analyst call

There will be a call for analysts regarding the arrangements
described in      this announcement on 3 September 2009 at 0830hrs UK /
0930 hrs CET.  Please      contact Laurence Jones of Financial Dynamics
at Atrium@fd.com for the dial in      details.

For further information:

Financial Dynamics:                                              +44 (0)20 7831 3113
    Richard Sunderland
    Laurence Jones
    Stephanie Highett
    Richard.sunderland@fd.com

BACKGROUND

In August 2007, the previous management of the Company began a
strategic      review to identify and implement improvements to the
Company's management,      corporate governance and reporting
arrangements and processes, as well as a      review of the Company's
capital and financing structure.  The investment and      restructuring
package proposed by the Investors, which was announced in March      
2008, subsequently approved by shareholders on 16 July 2008 and
implemented      in August 2008, was seen as an opportunity for the
Company to bring about      change in a significantly shorter
time-frame than it could achieve on its own      and to satisfy the
Company's funding requirements at that time.

Terms of the arrangements in 2008 included the Investors making an
immediate      EUR500 million investment in the Company through the
acquisition of      convertible bonds with a 10.75% coupon at a time
when the 'credit crunch' had      significantly reduced the
availability of commercial financing.  It was also      a condition of
their investment that the Investors were provided with      significant
consent and information rights under the terms of the      Relationship
Agreement with the Company.

On completion of this transaction in August 2008, the Company's new  
internalised management, under the leadership of Rachel Lavine,
conducted an      assessment of the Company's existing development
pipeline and the returns it      would be likely to generate, if at
all, in light of the global financial      crisis.  This resulted in a
rationalisation of the Company's development      pipeline, and
consequently a reduction in the Company's anticipated cash      
requirements for development purposes.

In January 2009, in place of the rights issue contemplated at the
time of the      Investors' initial investment, the Company negotiated
arrangements with the      Investors to place 10,300,000 shares in a
partial exchange of EUR72,100,000      in nominal value of Convertible
Bonds and a corresponding reduction in the      voting rights attached
to the Special Voting Shares and the cancellation of      25,066,667
Warrants of the 30,000,000 Warrants then held by the Investors.

In addition, since August 2008, the Company has purchased in
aggregate EUR366      million nominal value of 2006 Notes and EUR60
million nominal value of the      Convertible Bonds.

The Company's management has focussed on strengthening the Company's
balance      sheet, enhancing cash flow as well as improving corporate
governance and      believes it is necessary to address the significant
interest burden posed by      the Convertible Bonds and reduce the
control rights held by the Investors      through the Relationship
Agreement.  In addition, the Proposals will simplify      Atrium's
voting structure and mean that one share equals one vote.  This puts
Atrium in an improved position to achieve further growth, either
organically      or by utilising its strong cash position, and, if
required, by raising less      expensive and less restrictive debt, to
take advantage of acquisition      opportunities.

DETAILS OF THE PROPOSALS

Exchange of Convertible Bonds, Warrants and Special Voting Shares

The Company has agreed with the Investors to exchange the outstanding
EUR427.9 million in principal amount of the Convertible Bonds and
4,933,333      Warrants held by the Investors for an aggregate
consideration of 144,853,705      new ordinary shares of the Company
and approximately EUR9.3 million in      cash.  The Company will pay
interest on the Convertible Bonds until the      earlier of the closing
of the Exchange Transaction and 30 September 2009.      As part of the
exchange, the outstanding 8,043 Special Voting Shares held by      the
Investors will be repurchased by the Company for a nominal
consideration      and cancelled.

The buyback of the Convertible Bonds from the Investors will result
in a      saving of EUR46 million per year equivalent to EUR0.12 per
share per year      (assuming 372,052,992 shares in issue) for the
Company in future interest      payments on the Convertible Bonds until
2013 when the Convertible Bonds first      become redeemable, or a
saving of EUR268 million if they were to be held to      maturity in
2015.

The new ordinary shares to be issued to the Investors will be subject
to a      six month lock up from the date of closing of the Exchange
Transaction,      subject to customary exceptions including the pledge
of the shares as      security.  The Company intends to apply for the
new ordinary shares to be      listed on the Vienna Stock Exchange and
NYSE Euronext Amsterdam.

Amendments to the Relationship Agreement and the Articles

The Investors have agreed to the removal or reduction of many of the
consent      rights contained in the Relationship Agreement, in order
to enhance the      board's autonomy. In addition, it is proposed that
the existing rights of the      Investors under the Articles to appoint
certain directors be removed and      replaced with new rights to
appoint certain directors to reflect the fact      that they will hold
only ordinary shares.

A summary of the proposed amendments to the Relationship Agreement
and the      changes to the Articles are included in the annex to this
announcement.

Special Dividend

The Company proposes to pay the Special Dividend to the holders of
its      ordinary shares of EUR0.50 per ordinary share.

The record date for the entitlement to the Special Dividend and the
payment      date will be set and announced after closing of the
Exchange Transaction.      The new ordinary shares to be issued to the
Investors and all currently      issued shares will be entitled to the
Special Dividend.

Dividend policy

Subject to closing of the Exchange Transaction, the Company intends,
with      effect from the fourth quarter of 2009, and subject to legal
and regulatory      requirements and restrictions and commercial
viability, to distribute EUR0.12      per ordinary share per year
payable in quarterly instalments to the holders      of its ordinary
shares.

Partial tender offer for the 2006 Notes

The Company also intends to launch a partial tender offer of the 2006
Notes      at a price of EUR95 for every EUR100 in nominal amount,
capped at EUR120      million in nominal amount.  Acceptance in full of
the tender offer would      save the Company EUR7.7 million per year,
or EUR29.3 million in total, in      interest payments until maturity
in August 2013.  Further details of the      tender offer, which is
expected to be launched following closing of the      Exchange
Transaction, will be announced in due course.

Conditions precedent

The Exchange Transaction is subject to fulfilment of a number of
conditions.      These include the passing of certain resolutions by
shareholders of the      Company at an EGM and anti-trust clearances.
The remainder of the Proposals      are conditional upon the closing of
the Exchange Transaction.

Extraordinary General Meeting

The Company will shortly convene an EGM at which resolutions will be
proposed      to:

. make Atrium a no par value company to facilitate the issue of new
ordinary      shares;

. amend the Articles to extend certain shareholder rights and to
replace the      existing rights of the Investors to appoint certain
directors with new rights      dependent on their holding of ordinary
shares;

. amend the Articles to facilitate the payment of dividends by the
Company out      of its capital reserves, including the Special
Dividend, payment of which is      conditional onclosing of the
Exchange Transaction; and

. approve a resolution to authorise the Company to purchase up to 50
million      ordinary shares of the Company, to replace the existing
authority to acquire      up to 50 million of the Company's Austrian
Depository Certificates, now that      the ordinary shares are listed
on the Vienna Stock Exchange and Euronext      Amsterdam.

The circular, which will include the notice convening the EGM and
provide      further details of the matters to be considered, will be
made available on      the Company's website (www.aere.com) at the time
of its publication.

Interests of the Investors in the Company

Following the Exchange Transaction, the Investors and their
affiliates will      own in aggregate 48.6% of the shares of the
Company carrying 48.6% of the      Company's outstanding voting rights.
The remaining outstanding Special      Voting Shares held by the
Investors will be acquired and cancelled by the      Company on closing
of the Exchange Transaction pursuant to the existing      shareholder
repurchase authority.

The Investors have confirmed to the Company that, for a period of
twenty      months after closing of the Transaction for so long as
EUR100 million or more      in principal amounts of the Company's 2006
Notes remain outstanding, the      Investors and their affiliates will
not acquire securities of the Company      that would result in their
aggregate ownership of the Company triggering a      change of control
for purposes of the 2006 Notes.

Important notice This announcement includes statements that are, or may be deemed to be, ''forward-looking statements''.  These forward-looking statements can be identified by the use of forward-looking terminology, including the terms ''believes'', ''estimates'', ''anticipates'', ''expects'', ''intends'', ''may'', ''will'' or ''should'' or, in each case, their negative or other variations or comparable terminology.  These forward-looking statements include matters that are not historical facts.  They appear in a number of places throughout this announcement and include statements regarding the intentions, beliefs or current expectations of the Company and its group, including in relation to the closing of the transactions described in this announcement and their potential effect, payment of the Special Dividend and the proposed dividend policy of the Company.  By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future.   Forward-looking statements are not guarantees of future performance. The business, financial condition, results of operations and prospects of the Company and its group may change.  Except as required by law or applicable regulation, the Company does not undertake any obligation to update any forward-looking statements, even though the situation of the Company or its group may change in the future.  All of the information presented in this announcement, and particularly the forward- looking statements, is qualified by these cautionary statements.  This press release appears as a matter of record only and does not constitute an offer to sell or a solicitation of an offer to purchase any security.

Atrium is established as a closed-end investment company domiciled in Jersey. Atrium is registered with the Dutch Authority for the Financial Markets as a collective investment scheme which may offer participations in The Netherlands pursuant to article 2:66 of the Financial Supervision Act (Wet op het financieel toezicht). All investments are subject to risk. Past performance is no guarantee of future returns. The value of investments may fluctuate. Results achieved in the past are no guarantee of future results.

ANNEX:         SUMMARY OF PROPOSED CHANGES TO THE RELATIONSHIP AGREEMENT
AND ARTICLES      RELATIONSHIP AGREEMENT CHANGES CONSENT RIGHT REMOVED:
. If total indebtedness of the Company and its group is at any time
to exceed      60 per cent. of the value of the Company and its group's
real estate      portfolio (including both investment properties and
developments in progress)      as shown in the books of account of
members of the Company and its group and      calculated on a
consolidated basis;  . Any change in either the memorandum or
articles of association of any member      of the Company or its group
which affects the rights and obligations of the      Investors;  . Any
liquidation, winding up, moratorium, dissolution, consolidation or    
amalgamation in any jurisdiction of the Company or any member of its
group,      any appointment of a receiver, administrator,
administrative receiver,      trustee or similar officer to, and any
corporate restructuring of, the      Company or any of member its
group;  . Any material commitment or incurring of liability by the
Company or its group      outside of the ordinary course of business of
the Company and its group;  . Any commitment or incurring of
liability or obligation by the Company in      excess of EUR200 million
and any increase in an existing commitment or      liability or
obligation of any Company by more than EUR200 million;  . The payment
of any dividend or distribution or purchase or redemption or buy-      
back or repayment of any capital instrument of the Company or its
group;  . Any change to the structure of the board of directors of
the Company (which      does not include changes to the identity of the
persons appointed as      directors of the Company), save for the
annual election or re-election of      independent directors by the
shareholders;  . Any change to the share capital of the Company;  .
The selection of a venue for the re-listing of the ordinary shares or
certificates;  . The appointment of any auditor to the Company other
than KPMG, Deloitte,      Ernst & Young or PricewaterhouseCoopers.

CONSENT RIGHT ALTERED TO A SPECIAL RESOLUTION OF SHAREHOLDERS AS A
WHOLE AND TO BE INCLUDED IN THE ARTICLES  . Any material change in
the business of the Company or its group, which is to      own, manage
and develop retail real estate assets in Central and Eastern      
Europe;  . Issuance of new equity or capital by the Company or a
member of its group,      including ordinary shares (whether fully or
partly paid), certificates,      rights, options or warrants to
purchase ordinary shares or certificates and      other convertible or
quasi-equity securities, and any issuance of shares,      certificates,
rights, options or warrants to purchase shares or certificates      and
any other convertible or quasi-equity securities issued by the
Company;

CONSENT RIGHT RETAINED BUT INCREASED TO 20% OF THE COMPANY'S GROSS
ASSET      VALUE

@@start.t5@@. The sale or financing in a single or series of transactions directly or
         indirectly of more than 10 per cent. of the net assets of the Company at
         that time calculated on a consolidated basis;
      . The acquisition of any assets (including any investment in or acquisition
         of, shares or securities issued by a person, any making of capital
         contribution to any person, any investment in or acquisition of, any
         business or whole or part of the assets of business of any person or any
         assets constituting a division or operating unit of the business of any
         person) in a single or series of transactions directly or indirectly which
         in any of the forgoing cases has an aggregate value equal to or greater
         than 10 per cent. of the net assets of the Company and its group at that
         time calculated on a consolidated basis;
      . The entry into any agreement or arrangement or commitment to enter into or
         to obtain an option to enter into by the Company of any material joint
         venture, material partnership, material consortium or other similar
         arrangement where materiality shall be measured by reference to an amount
         equal to 10 per cent. of the net asset value of the Company immediately
         prior to the relevant action occurring.

    CONSENT RIGHT RETAINED
      . The entry into any agreement or arrangement or commitment to enter into or
         to obtain an option to enter into by the Company or any member of its
         group, any material transaction with either of the Investors or any of
         their respective affiliates, where materiality shall be measured by
         reference to an amount equal to 10 per cent. of the net asset value of the
         Company immediately prior to the relevant action occurring;
      . Any change in the tax jurisdiction of the Company that would have a
         material adverse impact on shareholders;
      . The appointment or replacement of the Chief Executive Officer of the
         Company and clarified so that appointment includes the appointment of an
         interim CEO.@@end@@

The Relationship Agreement will terminate if the Investors hold in
aggregate      less than 20,000,000 ordinary shares.

Subject to the passing of a special resolution of the shareholders,
the      existing rights of the Investors under the Articles to appoint
certain      directors and officers will be terminated and new rights
will be given to the      Investors to reflect the fact that they will
hold only ordinary shares, so      that they may appoint:

. four directors, the chairman and a majority of the nomination
committee for      so long as they hold in aggregate at least
80,000,000 ordinary shares;

. three directors with at least 60,000,000 ordinary shares;

. two directors with at least 40,000,000 ordinary shares;

. one director with at least 20,000,000 ordinary shares; and in addition

. the Investors may determine the chairman of the board of directors
and a      majority of the nomination committee for so long as they
hold an aggregate of      at least 55,000,000 ordinary shares.

Notes to Editors: About Atrium European Real Estate Limited

Atrium is a leading real estate company focused on shopping centre investment, management and development in Central and Eastern Europe. As at 30 June 2009 the Group owned 152 standing investments, with a market value of EUR1.49 billion, diversified across eight countries with a total gross lettable area of 1.1 million sqm. Geographically, the Group's focus is principally concentrated in Poland, the Czech Republic and Russia with a presence in Hungary, Romania, Slovakia, Latvia and Turkey. In addition, the Company has a development portfolio including several development projects with a market value of EUR712 million as at 30 June 209.

Gross rental income from investment properties for the year ended 31 December 2008 was EUR134 million and EUR75 million for the first half of 2009.  Net rental income for the year to 31 December 2008 amounted to £95 million and EUR59 million for the six months to 30 June 2009. As at 30 June 2009, the Company had a cash position of EUR855 million against borrowings of EUR1.08 billion.

Following a strategic investment of EUR500 million by a Citi Property Investors and Gazit Globe Ltd joint venture, agreed in August 2008, Rachel Lavine was appointed Chief Executive Officer of Atrium. Rachel Lavine has significant experience of both real estate and the CEE region and was previously President and CEO of Plaza Centres.  The Board is chaired by Chaim Katzman, founder of Gazit Globe, which has extensive global experience of real estate management and is one of the largest owners of shopping centres in the world.

The Company is based in Jersey and dual listed on the Vienna and Euronext Amsterdam Stock Exchanges under the ticker ATRS.

@@start.t6@@end of announcement                                                 euro adhoc
--------------------------------------------------------------------------------@@end@@

ots Originaltext: Atrium European Real Estate Limited
Im Internet recherchierbar: http://www.presseportal.ch

Further inquiry note:
Financial Dynamics, London
Richard Sunderland  / Laurence Jones
Phone: +44 (0)20 7831 3113
mailto:richard.sunderland@fd.com

Branche: Real Estate
ISIN:      AT0000660659
WKN:        066065
Index:    Standard Market Continous
Börsen:  Wien / official market



Weitere Meldungen: Atrium European Real Estate Limited

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