In order to refinance part of your debt, raghsa, one of the largest real estate developers in Argentina and owner of several emblematic brands in the sector such as Le Parc, went out to seek funds in the capital markets.
The real estate developer, also the owner of the Plaza San Martín building and several towers in Puerto Madero, among other premium properties, has just launched a new issuance of Class 5 Negotiable Obligations in exchange for a previous Class 3 series to stretch and reshape the maturity terms of part of its liabilities.
Since 1989, Raghsa has developed more than 380,000 m2 of premium office and commercial properties, of which approximately 103,918 m2 constitute leasable area currently owned by the company and leased to its clients. In addition, it has developed and sold more than 340,000 m2 of residential units. It was founded in 1969 by the businessman Moses Khafif, who at the age of 91 died a few days ago left surrounded by his family, friends and collaborators.
Low profile and considered a born entrepreneur, with an inspiring personality for the entire team and the international real estate market, he left a legacy that will continue Gloria Btesh de Khafif, currently vice president of the group until the board discusses the appointment of a new president.
What the latest Raghsa balance sheet says
He last balance presented by Raghsa reported losses of $16,036 million, mainly due to the result of the sale of investment properties, the net exchange difference, offset by income from property sales and income tax.
That is, for the inflationary effect and dollar fluctuations in their businesses, along with higher costs and the logical time lag between the time the company decides to develop a property and estimates the expenses and the time the property begins to generate income, a period that is generally between two and three years.
Raghsa was founded in 1969 by businessman Moisés Khafif, who passed away last February at the age of 91.
In addition, the company’s main sources of liquidity are the cash generated by the cash flows obtained from rentals, loans and financial debts, the proceeds from eventual sales of investment properties and capital contributions.
Reprofile to seven years
The new ONs will expire seven years from the issuance date and the company’s objective is to obtain at least a little more than US$91 million. The titles will be protected by its global program authorized by the National Securities Commission (CNV) on October 29, 2022.
According to the prospectus sent by Raghsawill issue Class 5 ON for a total face value of up to US$91,891,840 in exchange for Class 3 ON that were issued on March 21 and 30, 2017 for a total face value of US$119,729,840.
The new securities accrue interest semiannually at a rate equivalent to 7.25% annual nominal, the capital will be amortized in a single payment and the maturity date is March 21, 2024. Currently, the total outstanding amount of the ON Clase 3 in circulation amounts to u$s91,891,840.
In this sense, the original expiration date of the exchange was established for April 13, at 11 a.m. in New York City, although the company reserves the right to extend said date and time. The minimum subscription amount of the new ON is US$1,000 and the expiration date will be the day after seven years from the issuance.
The original expiration date of the exchange was established for April 13.
Meanwhile, the capital will be repaid in a single payment on the due date; The ONs will accrue interest at a fixed rate of 8.25% annual nominal with respect to the amount of capital pending payment of the ON Clase 5.
There will be an optional premium redemption that can be carried out at any time, before April 17, 2024, when Raghsa will be able to recover the Class 5 ONs, in full but not in part, at a redemption price equal to the amount that is greater than 100% of the amount of capital outstanding, or the sum of the present value of each remaining scheduled principal and interest payment discounted until the redemption date on a semi-annual basis, in each case plus the accrued and unpaid interest on the Class 5 ONs up to the redemption date. An optional redemption without compensatory premium may also be opted for.
inflationary fear
In this context, inflation is another of the risk factors analyzed raghsa, within the framework of a vulnerable economy that adversely affects the results of its operations, with increases in operating costs.
Similarly, the effects of exchange rate fluctuations or devaluations of the peso against the dollar increase the level of debt of the company.
Due to the fact that an important part of its income is linked to the North American currency, an increase in the weight value would negatively affect your revenues and profitability while fluctuations in foreign currency exchange rates could increase the risk of default on your dollar-denominated sales or lease receivables.
Similarly, the exchange restrictions Government-imposed restrictions prevent or restrict your access to the dollar, affecting your ability to meet your debt commitments.
