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Multi Corporation has lashed out at suggestions that US private equity giant Blackstone is poised to obtain ‘substantial control’ over the pan-European shopping centre developer.

In an exclusive Q&A interview with PropertyEU, Multi Corporation’s CEO Heino Vink addresses for the first time speculation in recent media reports that Multi is unable to meet its financial commitments. ´We’re not taking part in any games.’

Vink returned this week from Turkey where Multi is working on the further expansion of its portfolio. The developer has just launched two new projects in Turkey and another two in its home country, Vink told PropertyEU. ‘That’s quite an achievement in times like these.’

The success of the Dutch developer, which emerged as the leading retail developer in Europe according to PropertyEU’s latest ranking, was overshadowed last week following reports that Blackstone had acquired a major stake in the company’s €900 mln loan with a consortium of banks led by NIBC at a hefty discount.

In line with its general strategy of acquiring distressed assets, Blackstone paid less than 50 cents per $1 of face value for Multi’s debt, a source close to the deal told PropertyEU. The US private equity group was already familiar with the developer’s assets, having acquired the ‘Project Isobel’ loan portfolio from Royal Bank of Scotland at the end of 2011. The £1.36 bn portfolio included Multi’s loan on its Southgate shopping centre in Bath, in the UK. Multi is now in the process of selling its 50% stake in the centre, which is believed to be under offer to UK pension scheme USS for £125 mln.

At the time the reports about Blackstone surfaced, Multi responded by saying that it was continuing to meet its financial obligations. Blackstone has declined all comment.

PropertyEU: Well-informed sources have alleged that Multi told some of its lenders last month that it is not going to pay interest on loans it took out to buy land when prices were peaking and that Multi needs to restructure its outstanding debt. Can you comment on this?

Vink: ‘Initially we thought we shouldn’t respond to all sorts of speculation. As long as Multi meets it contractual obligations with the banking consortium there’s no reason for concern. NIBC also confirmed this on behalf of the banking consortium. I can add that it is our expectation that we will continue to meet our obligations until the loan matures and that Blackstone does not have a majority stake of the loans let alone a majority say. Blackstone may try to buy Multi’s loans at a favourable rate by taking advantage of these types of rumours. That is a serious threat to Multi’s interests and the interests of the other members of the banking consortium.’

PropertyEU: Can you explain why Blackstone would do this?

Vink: ‘Blackstone could have an interest in trying to improve its own position. Uncertainty could lead to other banks selling their loan at a discount. That would help Blackstone increase its returns. The conflicting interests between Blackstone and the other banks in the consortium could be exploited in this way.’

PropertyEU: Multi has a pan-European retail business across 14 European markets but Turkey is a key base outside the Netherlands. Do you think Blackstone is mainly interested in Turkey?

Vink: ‘It is quite possible that Blackstone would try to capitalise on our position in Turkey, but I’m not going to speculate further on that. For us, it is very frustrating and damaging that this is happening at this time. Everybody knows how difficult it is now to get projects started. We have managed to launch retail projects in the near term in the Turkish cities of Diyarbakir and Adana.

PropertyEU: Blackstone has a relationship with Multi Development since 2011 when it acquired the Project Isobel loan portfolio from Royal Bank of Scotland which includes a loan for Multi’s Southgate shopping centre in Bath. Can you comment on this relationship?

Vink: ‘Multi is also meeting its commitments on this development loan. Apart from this, I can only comment on deals when they’re done. We are busy with our profession. That’s clear from the fact that we are starting two new projects in Turkey and another two in the Netherlands. That is quite an achievement in times like these.’

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