Orco Property Group to reduce debt by equitizing EUR 129 Million of Orco Germany bonds

ORCO Germany S.A. / Key word(s): Bond

20.12.2011 / 09:10

---------------------------------------------------------------------

Orco Property Group ('OPG') has entered into a Binding Term Sheet with a
majority  of Orco Germany ('OG') bondholders whereby all of the OG bond
debt of EUR 129.1  Million due on 30 May 2012 will be substituted into
bonds convertible in shares ('OCA' ) issued by OPG. The OCA will be
exercisable in two steps. The first part of EUR 79.1 Million of the OCA
will be immediately converted into 19,250,010 new OPG shares at the
conversion price of EUR 4.10 at the end of January 2012, increasing OPG's
share capital to 36,303,876 shares.

In a second step to take place by the end of April 2012, the remaining EUR
50.0 Million part of the OCA will be converted into an additional 7,996,158
new OPG shares at the price of EUR 6.27 per share , therefore giving an
average blended conversion price of EUR 4.74. If however certain
deleveraging conditions of OPG are not fulfilled by April 2012, OPG will
have the discretion to repay this remaining part of the OCA in either cash
or shares in OG or OPG. In the case of shares, the OCA holders will then
have the discretion to accept (i) an additional 7,996,158 in new OPG shares
at EUR 6.27 or (ii) 55% of the outstanding OG share capital.

The OG bonds acquired by OPG will be converted into new OG shares through a
capital increase which will reinforce OG's balance sheet with EUR 129.1
Million of equity. OPG's control of OG will then increase to a stake in
excess of 97%.

This transaction will reduce the LTV of the OPG group from c. 67% to c. 60%
and the LTV of the OG group from c. 79% to c. 64%.

In addition to the fulfillment of legal and regulatory requirements, the
Binding Term Sheet is subject to OPG's Board approval which is expected in
the next days. In addition, approval from the assemblies of the relevant OG
instrument holders is expected to take place in February 2012.

Following the Binding Term Sheet, OPG shall engage in discussions called by
holders of certain OPG bonds, who have appointed an advisor, regarding a
possible conversion of all or part of the outstanding OPG Bonds into OPG
shares. The OG bondholders have also proposed that a management incentive
plan aligning the interests of the new and existing OPG shareholders with
those of the OPG management be put in place.

OPG has given access to certain information to the OG bondholders, under a
confidentiality agreement. The information which would be susceptible to
have a significant effect on the trade prices of the financial instruments
of OPG or OG is disclosed in the document named 'Orco Property Group -
Updated Safeguard Business Plan - December 2011' which is available on the
OPG website
http://www.orcogroup.com/investors/financial-documentation/safeguard-docum
ents.

Jean-Francois OTT, President & CEO of OPG stated:  'The deleveraging of OG
paves the way for the refinancing of our GSG asset in Berlin this spring.
GSG, with its low risk - high upside potential, shall remain at the heart
of the OPG investment strategy. This conversion in OPG shares, following
the MSREF transaction, strengthens the Group's equity and its value
creation capacity, and opens new equitization possibilities for the OPG
bondholders'.


Contact:
For more information, please write to investors@orcogroup.com


End of Corporate News

---------------------------------------------------------------------

20.12.2011 Dissemination of a Corporate News, transmitted by DGAP - a
company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.

DGAP's Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Media archive at www.dgap-medientreff.de and www.dgap.de

---------------------------------------------------------------------


Language:    English                                           
Company:     ORCO Germany S.A.                                 
             40, Parc d'Activités Capellen                     
             8308 Capellen                                     
             Grand Duchy of Luxembourg                         
Phone:       +49 (0)30 390 93 116                              
Fax:         +49 (0)30 390 93 199                              
E-mail:      patricia.jaenisch@orco-gsg.de                     
Internet:    www.orcogermany.de                                
ISIN:        LU0251710041                                      
WKN:         A0JL4D                                            
Listed:      Regulierter Markt in Frankfurt (Prime Standard);  
             Freiverkehr in Düsseldorf, Stuttgart              
 
 
End of News    DGAP News-Service  
---------------------------------------------------------------------  
150374 20.12.2011