BEACHWOOD, Ohio, Feb. 2, 2011 /PRNewswire/ -- Developers Diversified Realty Corporation (NYSE: DDR) today announced that its joint venture, Sonae Sierra Brasil, completed an initial public offering of Sonae Sierra Brasil's common shares on the Sao Paulo Stock Exchange, or the BM&FBOVESPA. Sonae Sierra Brasil's shares will begin trading on the Novo Mercado segment of the exchange under the ticker symbol SSBR3, beginning on Thursday, February 3, 2011.
Sonae Sierra Brasil's portfolio consists of 10 shopping centers in Brazil, eight of which are located in the State of Sao Paulo. The centers represent approximately 203 thousand square meters of owned gross leasable area. Three additional shopping centers are currently under development.
The offering of 21,739,130 common shares priced at R$20.00 per share (US$12.00). Gross proceeds of R$434.8 million (approximately US$261 million) will be used primarily for development of new Prime retail centers and the redevelopment and expansion of Sonae Sierra Brasil's existing assets in Brazil. Based on the IPO price, Sonae Sierra Brasil will have a market capitalization of R$1.498 billion (US$900 million).
In addition, a portion of the gross proceeds will be used to repay a loan from Sonae Sierra Brasil's parent company of approximately 31.6 million euros (approximately US$43 million), of which 50% will be paid to Developers Diversified.
As a result of the IPO, Developers Diversified's effective ownership interest in Sonae Sierra Brasil is reduced to approximately 34% from 48%, prior to giving effect to any purchase of additional common shares by the underwriters.
The underwriters have a 30-day option to purchase up to an additional 2,173,913 common shares to cover over-allotments, if any.
Daniel B. Hurwitz, president and chief executive officer of Developers Diversified, stated, "We are pleased that Sonae Sierra Brasil completed this offering, which provides important growth capital to our joint venture, without requiring additional leverage and without requiring Developers Diversified to export additional equity. This transaction is consistent with our strategic goal of operating with less risk – specifically, lowering leverage and improving liquidity – while still participating in the attractive opportunities that exist in this emerging market."
Developers Diversified owns and manages approximately 570 retail operating and development properties in 41 states, Brazil, Canada and Puerto Rico. Totaling approximately 132 million square feet, the Company's shopping center portfolio features open-air, value-oriented neighborhood and community centers, mixed-use centers and lifestyle centers located in prime markets with stable populations and high-growth potential. Developers Diversified is the largest landlord in Puerto Rico and owns a premier portfolio of regional malls primarily clustered around Sao Paulo, Brazil. Developers Diversified is a self-administered and self-managed REIT operating as a fully integrated real estate company. Additional information about the Company is available on the Company's website at www.ddr.com.
SOURCE Developers Diversified Realty Corporation