Annual report 2008 - Altarea Cogedim

Financial resources
III Financial
resources
1. Financial position
1.1 Introduction
2008 was subject to severe liquidity problems in the
interbank market, resulting in more restricted access to
credit and wider spreads. In this uncertain climate, the
ALTAREA Group benefited from its considerable strengths:
• Cash and cash equivalents of €482 million, comprising
€422 million of available cash and €60 million of
authorised loans under firm term sheet.
• Debts with long maturities, with no major repayments due
until mid-2013;
• Robust consolidated bank covenants (LTV of less than
65% and ICR of over 2), with significant leeway as at
31 December 2008 (LTV of 53.4% and ICR of 2.6)
These strengths are based primarily on a business model
generating a high level of cash flow, even during times of
crisis.
1.1.1 Cash and cash equivalents: €482 million
Available cash: €422 million
Resulting mainly from the capital increase carried out in
July 2008, available cash amounted to €422 million at
the start of January, comprising corporate resources of
€332 million (cash and confirmed authorisations) and loan
authorisations secured against specific developments of
€90 million (mortgage financing).
Financing under firm term sheet: €60 million
At the start of 2009, the Group had additional financing
subject to a term sheet of €60 million, which should increase
its cash and cash equivalents in the coming weeks.
1.2 Commitments and liquidity
The Group’s cash and cash equivalents exceed its identified
commitments.
Financing of investment in shopping centres: €366 million
All identified commitments and non-committed investments
in “ready for works to begin“ projects (25) representing a
total of €366 million are financed by existing cash and
cash equivalents to be paid out between 2009 and 2012.
The Group’s aim is to obtain ad hoc financing for all of
its development projects when the time comes in order to
maintain a high level of liquidity.
Financing of property developments
For development projects on behalf of third parties (offices
and residential property), the prudential criteria to begin
works require a proven level of pre-marketing allowing for
financing under current market conditions without the use
of additional equity on top of the existing allocation.
13 Debt by type
ALTAREA’s net debt stood at €1,908.0 million at 31 December
2008 compared with €1,848.0 million at 31 December 2007.
(in €m) 2008 2007
Corporate debt 772 704
Mortgage debt 980 734
Debt relating to acquisition of Cogedim 300 300
Property development debt 152 213
Total gross debt 2,204 1,951
Cash and cash equivalents (296) (103)
TOTAL NET DEBT 1,908 1,848
• Corporate debt is subject to consolidated bank covenants
(LTV of less than 65% and ICR of over 2).
• Mortgage debt is subject to covenants specific to the
property financed in terms of LTV, ICR and DSCR.
• Property development debt secured against development
projects is subject to covenants specific to each
development project (pre-marketing).
• Debt relating to the acquisition of Cogedim is subject
to corporate covenants (LTV of less than 65% and ICR
of over 2) and covenants specific to Cogedim (EBITDA
leverage and ICR).
1.4 Financing obtained in 2008
The ALTAREA Group obtained financing of €319 million in
2008, broken down as follows:
• €210 million of mortgage financing for development
projects;
• €94 million of mortgage financing for operating
properties;
• €60 million of property development loans for residential
property development and commercial property activities.
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(25) €324 million committed still to be invested and €42 million not committed still to be invested (see 2.4.1)