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The Athens Mall “gilds” Lamda Development

Lamda Olympia Village (LOV) pays Lamda Development 61 million euros in dividends and a refund. Agreement with National Bank of Greece (NBG) for loan refinancing. LOV’s contribution to Lamda Malls before its admission to the Athens Stock Exchange (ASE).

Its 100% subsidiary Lamda Olympia Village (LOV), whose main activity is the exploitation of the “The Mall Athens” shopping center, has donated or will donate the amount of 61 million euros to Lamda Development.

The decision of the regular general meeting of June 10 decided to reduce the share capital of Lamda Olympia Village, by the amount of 26 million euros, by canceling 44,067,836 shares.

The reduction was decided in order for the energy released from the reduction to be paid due to excessive liquidity to the shareholders. That is, Lamda Development, which owns 100% of its share capital.

Also on the agenda of the same general meeting was a proposal to distribute a dividend of 35 million euros (0.697 euros per share), of which 8.42 million euros relate to undistributed profits for the year 2019 and the remaining 26.57 million euros in undistributed profits for the years 2013-2018.

The company closed the year 2019 with profits after taxes of 47.4 million euros (23.4 million euros in 2018), thanks to the profits of 40.55 million euros from the valuation at a fair value of the investment property (The Mall Athens). The mall was valued on 31/12/2019 with a fair value of 483.35 million euros compared to 425.8 million euros at the end of 2018.

The dividend and the refund will be partially funded only by the company’s cashier and the rest by borrowing. It is noted that LOV agreed on March 10 with the NBG on the basic terms of refinancing existing borrowing and financing its business plan.

The loan from NBG will repay the unpaid balance of the bond issue covered by HSBC (157.4 million euros at the end of 2019) and the company’s investment plans will be financed. It is noted that last year LOV paid bonds totaling 22.6 million euros.

The company is demanding 40 million euros from the LOV Luxembourg SARL consortium, in which it participates with 50%, for a loan granted a few years ago with an interest rate of 5.5% and repayment at the end. The loan has a fixed interest rate of 5.5% and the capital will be repaid in full next month (July 2020).

The 61 million euros return on Lamda Development boosts the liquidity levels of the parent company, which is preparing to issue a bond loan. At group level, no changes occur.

The decision to return capital and distribute undistributed profits for the years 2013-19 is interpreted by the market as a preparation for LOV’s contribution to Lamda Malls, in order for the latter to enter the ACE within the first half of 2021, as stated by the group’s management at the recent general meeting.

All this, of course, presupposes the final urban planning arrangement of The Mall Athens shopping center based on the Presidential Decree issued on 24 February. LOV has already paid the NBG the amount of 11 million euros, while it has recognized an additional obligation of 6 million euros for the implementation of the requirements of the aforementioned Presidential Decree.