Parque Arauco Accepts Offer to Sell 49 Percent Participation of Parque La Colina and Parque Caracoli

Rhea-AI Summary

Parque Arauco S.A. (SSE: PARAUCO) has accepted an offer from Fondo de Inversión Colectiva Inmobiliario INMOVAL to purchase 49% of Parque La Colina and Parque Caracoli for COP$588 billion (approximately US$160 million). Following the transaction, Parque Arauco will retain 51% ownership and continue managing the shopping centers. The profit of COP$185 billion will enhance retained earnings. This move aligns with Parque Arauco's strategy to manage its portfolio and invest in new projects, according to CEO Eduardo Pérez Marchant. The deal awaits review by Colombia's Superintendent of Industry and Commerce.

Positive

• Transaction value is COP$588 billion, enhancing liquidity.
• PASA retains 51% ownership and control over the shopping centers.
• Profit of COP$185 billion will boost retained earnings.

Negative

• None.

Parque Arauco S.A. (SSE: PARAUCO; Bloomberg: PARAUCO:CI) (“Parque Arauco” or “PASA”) announces that its affiliates, Parque Arauco Colombia S.A. (“PACSA”) and Inversiones Inmobiliarias Bucaramanga Arauco S.A.S (“INBUCA”), have received and accepted an offer from Fondo de Inversión Colectiva Inmobiliario INMOVAL (“INMOVAL”), affiliate of Credicorp Capital Colombia S.A., to buy fiduciary rights of Parque La Colina and Parque Caracoli, resulting in PASA maintaining 51% and INMOVAL 49% ownership in those shopping centers.

The transaction price for the 49% of the assets is COP$588,000,000,000 (approximately US$ 160 million) and there is no debt involved.

PASA will maintain control, administration and operation of the malls. The profit of this transaction is COP$ 185,000,000,000 and will be accounted for in retained earnings in the equity section of the balance sheet (according to IFRS 10).

The transaction is subject to review by the Superintendent of Industry and Commerce of Colombia.

Eduardo Pérez Marchant, CEO of Parque Arauco International, mentioned, “This transaction is part of a broader strategy in Parque Arauco by which we continue to actively manage our portfolio and recycle capital for new projects. We are excited about our partnership with Credicorp Capital, a leading financial institution in the Andean Region.”

Currently, Parque Arauco has 1,071,500 m² of total GLA in Chile, Peru, and Colombia. The company inaugurated its first shopping center in Chile in 1982, entered Peru in 2005 and Colombia in 2008. The company’s assets include 8 regional shopping centers, 1 neighborhood center, 4 premium outlet malls and 18 strip centers in Chile; 6 regional shopping centers, 9 neighborhood centers, 2 premium outlet malls and 3 strip centers in Peru; 3 regional shopping centers and 1 premium outlet mall in Colombia, as well as a land bank to contribute to the company’s future growth plans. For more details, visit the company’s website: www.parauco.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210127006047/en/

FAQ

What is the value of the recent Parque Arauco transaction?

The transaction value is COP$588 billion, or approximately US$160 million.

What percentage of ownership does Parque Arauco retain after the transaction?

Parque Arauco retains 51% ownership of Parque La Colina and Parque Caracoli.

What will happen to the profit from the transaction?

The profit of COP$185 billion will be accounted for in retained earnings.

Who is the buyer in the Parque Arauco transaction?

The buyer is Fondo de Inversión Colectiva Inmobiliario INMOVAL.

Is there any debt involved in the Parque Arauco asset sale?

No, there is no debt involved in this transaction.