Company release no. 6 / 2012 – Interim release for the 1st quarter of 2012

Tower Group A/S 

19.04.2012 09:50
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Tower Group A/S hereby publishes the interim release for the first quarter of
2012, covering material events during the period of 1 January 2012 to 31 March
2012 according to §27 (8) of the Danish Securities Trading Act. 

Sales Process

The Company's main focus in the first quarter of 2012 was the ongoing sales
process for selected assets, which was initiated on 23 December 2011 (cf.
Company release no. 40, 22 December 2011). The selected Tower Group A/S assets
were offered to over 50 investors. The first few weeks of the quarter were
focused on identifying, following the reception of preliminary bids, a
shortlist of investors for a second and final bidding round. On 25 January 2012
(cf. Company release no. 1, 25 January 2012), the Company selected five bidders
who were provided with additional information and access to the Company,
including site visits, to finalize their proposals for the assets of the
offered entities. On February 29 2012, the Company received six final bids for
the offered assets. 

On 7 March 2012 (cf. Company release no. 2, 7 March 2012), the Company entered
into exclusive negotiations with one of the vendors. The selected bidder
offered the most balance recovery for all the stakeholders as well as providing
the highest certainty with respect to transaction execution.  As of the end of
the quarter, the Company was still in exclusive negotiations with the selected
party. 

Events subsequent to the end of the quarter, occurring on April 4 2012 cf.
Company release no. 5, 4 April 2012), led to the execution of a Share Transfer
Agreement to a consortium led by FFIRE Immobilien Verwaltung AG. A prerequisite
to the sale continues to be approval from the senior and junior lenders, among
other items, and the Company is currently in negotiations with these lenders to
finalize the documentation necessary to support the transaction. 

Financial position

Following the insolvencies that occurred in the fiscal year 2011 in some of the
German subsidiaries (cf. Company releases no. 26, 30 June 2011, no. 27, 21 July
2011, and no. 28, 18 August 2011), the remaining German portfolio comprises
eight subsidiaries (Tower 1 Immobilien erste GmbH, Tower 1 Immobilien sechste
GmbH, Tower 1 Immobilien siebte GmbH, Tower 1 Immobilien achte GmbH, and Tower
1 Immobilien neunte GmbH, Tower Pension 1 GmbH, Tower Pension 2 GmbH and Eranus
Investment GmbH) representing 231 buildings, 4,627 residential units, 300
commercial units (excluding parking units) for a total of 320,599 m². These
properties produce a yearly rent of EUR 18 million and currently have an
overall vacancy of 12.1%. 

Company activities

While the sale of the selected assets were the main focus, other activities of
the Company mainly focused on negotiating a handover of finance tranche 5 to a
trustee in cooperation with Bayerische Landesbank (Bayern LB), and continuing
to oversee the property and asset management work performed by alt+kelber
Immobilienverwaltung GmbH and conwert Immobilien Deutschland GmbH. 

Despite the current focus of the Company on spinning off its assets and the
lack of funding for capital improvements, asset performance has remained
substantially stable for the finance tranches which are still under the control
of the Company and included in the agreed sale. However, it is clear that over
the medium term the lack of funding and management focus will be detrimental to
asset performance. 

Expectations for the future

As the fiscal year 2012 will be materially impacted by the sale of the selected
assets, the management is not in a position to elaborate on the expectations of
the year-end result of the Company. 





Best regards

Tower Group A/S



Martin Coté

CEO



Questions regarding this release can be directed to Martin Coté, CEO, on tel.:
+420 725 716 755.
News Source: NASDAQ OMX



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Language:     English
Company:      Tower Group A/S
              
               
              Denmark
Phone:        
Fax:          
E-mail:       
Internet:     
ISIN:         DK0011188035
WKN:          
 
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