NEPI Rockcastle, AFI Europe hold talks, start arbitrage over failed EUR 300 mln deal

NEPI Rockcastle, the biggest mall owner in Romania, initiated the arbitrage procedure for getting the guarantee allegedly owed by Israeli developer AFI Europe's Romanian subsidiary following a EUR 300 mln office deal that failed, Agerpres reported.

AFI Europe signed the acquisition of NEPi Rockcastle's office portfolio in Romania for a sum of over EUR 300 mln last December. But after the coronavirus outbreak, AFI Europe put on hold the acquisition.

According to the report filed to Tel Aviv Stock Exchange, AFI Europe has requested the postponement of the acquisition, invoking the state of emergency in Romania and the high number of restrictions imposed by the authorities amid the coronavirus outbreak. Starting arbitrage over the guarantees owed by AFI Europe to NEPI means the payment was not disbursed when the former put the deal on hold.

Separately, the two sides have reportedly signed a non-binding memorandum of understanding (MoU) under which, "under certain conditions, the parties may terminate the arbitration convened in connection with the EUR 300 million transaction for NEPI Rockcastle's office portfolio and may enter into a new agreement, based on other price and conditions compared to the initial transaction."

(Photo source: Nepirockcastle.com)