Blackstone Group LP's real estate arm has reportedly taken over almost half of the Netherlands-based mall developer Multi Corp's debts. The firm has also gained control over one of the latter's malls in the U.K.
According to Businessweek, Multi Corp's corporate debts round off to around $1.2 billion, and Blackstone has taken over almost half of their debt. Blackstone paid 50 cents for each dollar at face value for the amount of debt it acquired. However, the exact amount is not known, as the deal has not yet been publicized.
Apparently, Multi's debts are handled by a consortium of financial institutions. Multi has been struggling to pay off its debts. In March, the firm failed to pay interest on loans that it had taken to acquire lands of commercial value. It tried to hold off the banks, stating that commercial property values were rising in the region. However, the missed payment is a major fallback for the firm. The banks might foreclose the company's land holdings and sell them away, reports The Financial Times.
Multi's total debt matures in 2015. Taking over the company's debts will give Blackstone entry into the European retail business, reports Bloomberg. Moreover, if Blackstone takes over Multi completely, it will probably recapitalize the firm.
Blackstone's real estate arm is the largest real estate private equity firm, with around $57 billion worth of assets under its management. The company has currently assigned around $3.5 billion for asset acquisition in the U.K.
Currently, Blackstone has been all over the news with the Dell Buyout deal. The company agreed to pay $14.25 for each share of the world's third-largest PC maker, as the latter plans to go private and cope with increasing competition in the tech world. Two other deals have also been offered to Dell.
However, CEO Michael Dell announced that he would consider either of the deals only if his position as the chief executive officer was unchanged in the whole buyout process.