As it was reported yesterday, the €300 million sale of NEPI Rockcastle’s Romanian office portfolio to AFI Europe has been suspended. In their separate announcements, the buyer claims that the completion of the transaction was impossible due to the COVID-19 related restrictions imposed by the authorities, while the seller insists that these restrictions did not prevent completion. The two companies have not reached a consensus on postponing the transaction’s deadline. NEPI Rockcastle has interpreted AFI Europe’s actions as a wish to cancel the acquisition and is now asking the company for a €15 million compensation.
According to an announcement published by AFI Europe on the Tel Aviv Stock Exchange, they have requested the postponement of the acquisition, invoking the state of emergency in Romania and the high number of restrictions imposed by the authorities amid the coronavirus outbreak.
NEPI Rockcastle’s official point of view is that the current restrictions due to the situation generated by COVID-19 did not prevent completion, as the authorities involved in processing the share transfer were open to the public and the contractual mechanism allowed for electronic completion.
According to the seller, the disposal was not completed as the purchaser’s obligations related to the completion procedures were not fulfilled, leading to a breach in the agreement which entitled NEPI Rockcastle to terminate the agreement and claim the contractual guarantee which is €15 million.
The sales agreement was signed at the end of last year and the transaction would have had to be completed by the end of Q1 2020. NEPI Rockcastle’s Romanian office portfolio, with a GLA of 118,500 sqm, includes four Class A office projects totalizing eight office buildings situated in Bucharest and Timisoara.
