Nets Sports & Entertainment makes capital-call payment
CLEVELAND, Sept. 8, 2015 /PRNewswire/ -- Forest City Enterprises, Inc. (NYSE: FCEA and FCEB) announced today that its subsidiary, Nets Sports & Entertainment (NS&E), made a $26.8 million payment for capital calls and fees related to its ownership interest in the Brooklyn Nets. The payment covers NS&E's share of team losses plus fees for the period of July 13, 2013, through September 8, 2015. The company had previously announced that a forbearance agreement related to the payment had been extended through September 8.
Commenting on the payment, Forest City President and CEO David J. LaRue noted, "We have chosen to make this payment to preserve NS&E's 20 percent ownership interest in the team, rather than suffer dilution which would reduce that interest to approximately 8 percent."
The funding of the forbearance payment does not impact the company's previously disclosed intention to seek a sale of its interest in the Nets, and it remains in active discussions with interested parties for a potential sale. There can be no assurance that the company will close on the sale of a portion or all of its ownership interest on terms favorable to it or at all.
NS&E is the consolidated subsidiary through which Forest City holds its ownership interests in the Nets and the Barclays Center arena. NS&E owns 20 percent of the Nets and 55 percent of Barclays Center. Forest City, in turn, owns approximately 62 percent of NS&E with the balance owned by minority partners.
About Forest City
Forest City Enterprises, Inc. is an NYSE-listed national real estate company with $10.3 billion in consolidated assets. The company is principally engaged in the ownership, development, management and acquisition of commercial and residential real estate throughout the United States. For more information, visit www.forestcity.net.
Safe Harbor Language
Statements made in this news release that state the company's or management's intentions, hopes, beliefs, expectations or predictions of the future are forward-looking statements. The company's actual results could differ materially from those expressed or implied in such forward-looking statements due to various risks, uncertainties and other factors. Risks and factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, the company's conversion to REIT status, its ability to qualify or to remain qualified as a REIT, realizing the anticipated benefits to shareholders if it successfully elects REIT status, the impact of complying with REIT qualification requirements, the amount and timing of any future distributions including those that it would be required to make as a REIT, the impact of issuing equity, debt or both to satisfy its E&P Distribution and other REIT conversion costs, the impact of covenants that could prevent it from satisfying REIT distribution requirements, its lack of experience operating as a REIT if it successfully converts, the impact of current lending and capital market conditions on its liquidity, its ability to finance or refinance projects or repay its debt, the impact of the slow economic recovery on its ownership, development and management of its commercial real estate portfolio, general real estate investment and development risks, using modular construction as a new construction methodology and owning a factory to produce modular units, vacancies in its properties, risks associated with developing and managing properties in partnership with others, downturns in the housing market, competition, illiquidity of real estate investments, bankruptcy or defaults of tenants, anchor store consolidations or closings, international activities, the impact of terrorist acts and other armed conflicts, risks of owning and operating an arena, risks associated with an investment in a professional sports team, the ability to sell all or a portion of its ownership interests in a professional sports team and arena, its substantial debt leverage and the ability to obtain and service debt, the impact of restrictions imposed by its credit facility and senior debt, exposure to hedging agreements, the level and volatility of interest rates, the continued availability of tax-exempt government financing, the impact of credit rating downgrades, effects of uninsured or underinsured losses, effects of a downgrade or failure of its insurance carriers, environmental liabilities, conflicts of interest, risks associated with the sale of tax credits, the ability to maintain effective internal controls, compliance with governmental regulations, increased legislative and regulatory scrutiny of the financial services industry, changes in federal, state or local tax laws, volatility in the market price of its publicly traded securities, inflation risks, litigation risks, cybersecurity risks, cyber incidents, its ability to achieve its strategic goals are based on significant assumptions, the effect on the market price of its common stock following its E&P Distribution and its conversion to REIT status, its ability to obtain the shareholder approval necessary for it to convert to REIT status, its ability to complete non-core asset sales, the impact to its deferred tax liability balance upon conversion to REIT status, and its ability to obtain requisite consents needed to complete the conversion to REIT status as well as other risks listed from time to time in the company's SEC filings, including but not limited to, the company's annual and quarterly reports.
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SOURCE Forest City Enterprises, Inc.
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