In line with the company’s portfolio recycling strategy, as a way to generate value to its shareholders, on March 8th, 2017, brMalls announced the sale of its stake in Itaú Power Shopping, as follows:
Summary of Operation:
*Cap rate considers LTM NOI and sale value is net of taxes (after taxes).
In April, 2018, the Company's CEO succession process began. The Board of Directors appointed Ruy Kameyama as the new CEO. He has been in the company for 10 years now, having gone through the M&A, Operations and Commercial departments and held, for the past 8 years, the position of COO.
The succession process lasted for about 1 month and immediately after its conclusion, Carlos Medeiros Silva Neto renounced and Ruy was elected, taking over the position of CEO.
During his 10 years as brMalls’ CEO, Mr. Carlos Medeiros contributed towards the construction and development of the Company, achieving significant results and displaying a successful track record. The Company would like to thank Mr. Carlos Medeiros for his dedication and important contributions to brMalls’ history..
In May, we completed our stock offering, raising over R$ 1.7 billion. This is an important milestone in this beginning of the new phase of the company. Our net debt / 12M adjusted EBITDA decreased from 4.2x in 1Q17 to 1.7x by the end of 2017.
Destination of Resources:
The new capital structure benefits our margins and places the company in a favorable position to seek new investment opportunities.
brMalls was elected one of the 15 "Companies where Brazilians Dream of Working" according to LinkedIn, being the only real estate company and the second company in the State of Rio de Janeiro.
In July we concluded the repurchase of the perpetual bond, a debt of US$ 378 million. With this, the company was able to end its exposure to foreign currencies, reducing volatility in its results.
With a healthier credit profile, the company continues to work on liability management and during the 3rd quarter of 2017, we renegotiated the rate on some of our TR indexed debts (our major exposure) and, with this, we reduced the average cost of our TR indexed debts (reference interest rate) by 30bps.
brMalls believes in the potential of its retailers as the main player in a disruptive scenario, therefore, in partnership with Endeavor, created BRMALLS Partners: an initiative designed to support entrepreneurs who are reinventing retail and are at the right moment of expansion.
Participating in the initiative were retailers with high growth potential, who were given access to technical support, exchange of experiences and know-how to accelerate their trajectory of success.
As a partner in this project, brMalls will act as a facilitator to guide and support entrepreneurs in the expansion of their business. In the first version of the project, more than 700 potential retailers became interested and, after a selection process, more than 50 companies went through face-to-face meetings.
The project has demonstrated strong potential for expansion and loyalty of highly attractive retailers.
Moody's upgraded the Brazilian national scale ("NSR") rating of BR Malls to Aa1.br, from Aa2.br, while Fitch revised its national rating outlook to positive.
The agency highlighted the company's size and scale as well as the significant deleveraging presented in the balance sheet during the year.
They also pointed out that the ratings reflect the high quality portfolio and improved operating performance as the economy and the retail sector recover from the country’s adverse scenario.
In December 2017, the company took another important step in the portfolio recycling strategy. We sold interest in 5 malls for a total of R$ 824.3 million at an average post-tax cap rate of 9.2%, the largest amount of sales made by the Company in a single year. This operation enables brMalls to use the proceeds from the sale for investments aligned with its strategy.
Shopping Granja Vianna and Shopping Paralela
*Cap rate considers LTM NOI and the sale value is net of taxes.