PORR: Spin-off of the real estate division

One becomes two: Focusing on construction group and real estate development group with a European profile.

Vienna, 2 October 2014 – As already announced in their half year press conference, PORR AG has taken an important step on the path towards streamlining its business activities. The acquisition of the majority interest in UBM Realitätenentwicklung AG (“UBM”) through PORR AG reveals the possibility of spinning off most previous real estate activities from its construction activities through an ownership ratio maintaining spin-off transaction, and combining these in the new PIAG AG. Each PORR AG shareholder will receive one PIAG share for one PORR share. The supervisory board of PORR AG has already approved this strategic plan of the management board. An extraordinary shareholders' meeting has been called for October 29.
 
In future, two independent listed companies will emerge, namely PORR AG with its activities in the construction industry, and PIAG AG with its assigned activities of UBM and Strauss & Partner Group (“Strauss & Partner”). Both companies will be better equipped in future to play to their strengths owing to their significantly streamlined company profiles. PIAG will be the parent company of UBM and Strauss & Partner and shall be merged with UBM in the first half year of 2015. PORR AG will remain after the spin-off a leading construction company in Europe with the same focus of activities and size.
 
PORR CEO Karl-Heinz Strauss on the decision for the spin-off: “By acquiring the majority interest in UBM, combined with PORR AG’s non-core real estates and Strauss & Partner’s real estate development activities, we are creating an independent real estate developer with a European profile. Both PORR AG and PIAG AG will profit from this move. PORR will improve its balance sheet and profit figures thanks to the lack of capital tied up in development projects and non-core real estates, and will also achieve a significant reduction in net debt. PIAG in turn will achieve the size required for a strong, independent presence on the capital market.”
 
PIAG – a real estate developer with a European profile
In future, more than 75% of project developments will take place in Germany, Austria, Poland and the Czech Republic. Selected projects will also be realized in other markets – including the Netherlands, Belgium, Luxembourg, Switzerland, and France. The focus will be on the asset classes “Office” (office real estate), “Hotel” (high yield hotels), “Residential” (housing real estate), “Commercial” (e.g. logistics buildings and shopping centers), and “Specific Trade real estate” (e.g. medical and educational facilities).
 
PORR CEO Karl-Heinz Strauss “We as PORR AG’s management board are convinced that the proposed spin-off of the real estate division out of the PORR Group will lead to a value enhancement of PORR, and herewith creating also added value for our shareholders. Furthermore, PORR shareholders can fully participate in the performance of the new  independent real estate developer PIAG.