CA Immo reassures shareholders despite Starwood’s special dividend

The distribution of more than half a billion euros was approved by the Extraordinary General Assembly on Tuesday.

CA Immo AG’s board of directors does not view the growth path as being jeopardized by the special dividend imposed by major shareholder Starwood Capital. “From today’s perspective, the required special distribution does not have any negative impacts on CA Immo’s business model,” Andreas Quint, president of CA Immo, said Tuesday at the extraordinary general meeting in Vienna, which approved this special payment.

The retired CEO said at the end of the year that the private push is rather the result of positive strategy implementation in recent years. Chief Financial Officer Andreas Schilhofer indicated that the Board of Directors is taking a neutral position on the special dividend of €5 per share. He stressed that the request was made by Starwood and not a management decision. The American financial investor owns about 57 percent of CA Immo.

A special dividend of €5 per share means a distribution of more than half a billion euros to CA Immo. The higher special payment was not approved by all shareholders. The criticism came from hedge fund Petrus Advisers, which described the move as not in the interest of free-floating. Other shareholders expressed concern about rising debt and increasing borrowing costs.

Schilhofer tried to calm down: the group continues to maintain sufficient fluidity as a safety cushion. “As a result of many years of positive business development, CA Immo has a very strong balance sheet and a high cash position of approximately €850 million as of September 30,” he said.

However, debt (indebtedness) will rise from 73 to 85 per cent and equity will decrease from 50 per cent to 46.5 per cent. In mid-November, rating agency Moodys downgraded the credit rating from Baa2 to Baa3 in connection with the private payment and changed the outlook to negative – the APA detailed. This means that the credit rating is only one level above the junk level.