Intended spin-off to accelerate real estate business
Implenia intends to transfer around half of its attractive development portfolio at market value into a new real estate company in the second quarter of 2020. Ina Invest will be a new Swiss real estate company with projects at top locations across Switzerland. The conditions are ideal for this move. Implenia and its shareholders will benefit from the transaction.
Implenia is well positioned to grow its real estate business. Division Development has delivered a consistently good performance and our portfolio is geographically diverse, offering a good basis for future growth in attractive locations across Switzerland. The market outlook is promising and Implenia’s operating model offers impressive expertise and proximity to the market. Ina Invest will benefit from these qualities thanks to its close cooperation with Implenia.
According to an indicative third-party valuation, Implenia’s attractive development portfolio has a current market value of more than CHF 600 million, or over CHF 3 billion at completion. Implenia intends to transfer half this development portfolio, with a current market value of around CHF 300 million, to Ina Invest. By crystallising the value of the transferred development portfolio, Implenia will have potential gross revaluation gains of approximately CHF 200 million.
The other half of the attractive development portfolio, which has a current market value of around CHF 300 million, will remain in the Division Development at Implenia. It contains potential future revaluation gains of around CHF 200 million (based on current market expectations), too. The focus here is on projects that Implenia, operating as it has done before as a trader-developer, develops in an early phase and then sells once building permit is granted. The portfolios of both Ina Invest and Implenia will be further expanded through acquisitions.
Implenia Ltd. will participate in Ina Invest Ltd. as a significant minority shareholder and is expected to hold at least 40% of the shares following the transaction. The remaining shares of Ina Invest Ltd. will be held by Ina Invest Holding Ltd., a likewise newly founded real estate company, whose shares will be listed on the SIX Swiss Exchange in June 2020. Implenia plans to distribute all shares of Ina Invest Holding Ltd. to Implenia shareholders. Implenia shareholders will vote on a special distribution of the Ina Invest Holding Ltd. shares by way of a dividend in kind to effect the spin-off of Ina Invest Holding Ltd. at the upcoming Annual General Meeting (AGM). If approved, shareholders will receive one Ina Invest Holding Ltd. share for every five Implenia shares. The Net Asset Value (NAV) per share of Ina Invest Holding Ltd. is approximately CHF 25 (or CHF 5 per Implenia share) based on valuation by a third party as per 31 December 2019. A brochure for shareholders enclosed with the invitation to the AGM contains further details as well as an indicative timetable for carrying out the transaction in the second quarter of 2020.
Concurrently to the spin-off, Ina Invest Holding Ltd. will raise new equity in the form of cash of approximately CHF 100 million. Implenia shareholders will receive non-tradeable subscription rights to acquire the new shares of Ina Invest Holding Ltd.
Cooperation between Implenia and Ina Invest along the value chain.
Extended value creation
Ina Invest AG will cover the entire value chain from initiation to realisation, as well as management and letting. New equity and debt financing for the development portfolio will accelerate the growth of Ina Invest. Ina Invest Ltd.’s initial portfolio will be expanded by means of investments of around CHF 50 million a year, and ultimately achieve a value of around CHF 2 billion on completion.
The new structure in context.
Implenia will offer Ina Invest Ltd. project, portfolio and asset management services, as well as construction services, at arm’s length. This expansion along the value chain will generate recurring earnings and an extended risk diversification for Implenia. In addition, Implenia will benefit from future dividend distribution as a significant minority shareholder in Ina Invest Ltd.. Both Implenia and Ina Invest Holding Ltd. will benefit from early involvement in conception, concretisation and realisation and from Implenia’s integrated operating model and market presence to identify new market opportunities.