DGAP-News: GAGFAH S.A. and the City of Dresden agree on amicable settlement
(firmenpresse) - DGAP-News: GAGFAH S.A. / Key word(s): Legal Matter
GAGFAH S.A. and the City of Dresden agree on amicable settlement
02.03.2012 / 20:05
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Press Release: March 02, 2012
GAGFAH S.A.
2-4, rue Beck
L-1222 Luxembourg
ISIN: LU0269583422
Frankfurt Stock Exchange, Regulated Market (Prime Standard)
GAGFAH S.A. and the City of Dresden agree on amicable settlement
Luxembourg, March 02, 2012 - GAGFAH S.A. and the City of Dresden agree on
amicable settlement to end legal dispute over the WOBA DRESDEN GmbH
Privatization Agreement. The settlement is subject to approval by the City
Council of Dresden and clearance by the City's legal supervision authority.
Key points:
- Resolution of the legal dispute directly benefits the tenants
- Investment in portfolio agreed to be increased with about EUR 15
million allocated to social projects
- Occupation rights for the city increased; Social Charter extended
In the interests of a timely resolution of the disputes and in order to
maintain good relations and cooperation, GAGFAH S.A. and the City of
Dresden have agreed to fully resolve their dispute by way of an amicable
settlement that will primarily benefit tenants in Dresden. Towards that
end, the WOBA companies and the City of Dresden have signed and notarized a
settlement agreement today. This agreement is subject to formal approval by
the City Council and clearance by the City's legal supervisory authority.
The City Council will probably decide about the approval on March 15, 2012.
The settlement agreement provides for the withdrawal of all lawsuits and
the mutual waiver of all claims made in connection with the litigation. It
has been agreed that in the future disputes between the parties will be
handled through an extrajudicial settlement process, and a cure period will
be employed to avoid contractual penalties. Furthermore, the City of
Dresden and the WOBA companies have agreed on several changes to the social
protection provisions, the 'Social Charter,' of the WOBA Privatization
Agreement. Certain defined Social Charter protection provisions will be
extended by five years until April 2021. The current contractual annual
minimum repair and maintenance investments for the properties of the WOBA
companies will be raised from EUR 5.00 per square meter to EUR 7.56 per
square meter (net). The City's occupation rights will also be raised by
2,000 to 10,000.
In addition, the City of Dresden will receive nine annual payments for the
period between 2012 and 2020 in the amount of EUR 4 million per year (a
total of EUR 36 million), of which 40% will be invested in social projects
that are to benefit GAGFAH's tenants in Dresden. The WOBA companies will
also reimburse the City of Dresden for the City's litigation costs up to an
amount of EUR 4 million. GAGFAH Group had already made provisions for
litigation expenses in the amount of EUR 8 million as of September 30,
2011. The asset strategy of the WOBA companies will not be impacted by the
settlement.
William J. Brennan, CEO of GAGFAH Group said, 'We have always said that we
were open to an out-of-court solution and have always believed that any
settlement would have to be for the benefit of our tenants. We would be
satisfied if the dispute could be resolved by this agreement.'
By way of background, on March 31, 2011, the City of Dresden filed legal
actions against WOBA Holding GmbH, Wohnbau Nordwest GmbH and SÜDOST WOBA
DRESDEN GmbH, claiming contractual penalties of EUR 1.084 billion for
alleged breaches of the WOBA Privatization Agreement. The WOBA companies
defended against these lawsuits and in response issued counter suits
against the City of Dresden as well as against the City's Finance Mayor,
Hartmut Vorjohann.
About GAGFAH S.A.
GAGFAH S.A. is a joint stock corporation organized under the laws of the
Grand Duchy of Luxembourg qualifying as a securitization company under the
Luxembourg Securitization Law of March 22, 2004. The core business of
GAGFAH S.A.'s operating subsidiaries is the ownership and management of a
geographically diversified and well maintained residential property
portfolio located throughout Germany. With a portfolio of approximately
155,000 apartments, GAGFAH is the largest residential property company
listed in Germany.
Contact:
Gagfah M Immobilienmanagament GmbH
Dirk T. Schmitt, Head of Communications
Tel. +49 170 302 8833, dschmitt(at)gagfah.de
Bettina Benner, Press Officer
Tel. +49 172 206 0336, bbenner(at)gagfah.de
Rene Hoffmann
Head of Investor Relations
GAGFAH S.A.
Tel. +352 266 366 21, rhoffmann(at)gagfah.com
End of Corporate News
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02.03.2012 Dissemination of a Corporate News, transmitted by DGAP - a
company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
DGAP's Distribution Services include Regulatory Announcements,
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Media archive at www.dgap-medientreff.de and www.dgap.de
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Language: English
Company: GAGFAH S.A.
2-4, rue Beck
1222 Luxemburg
Grand Duchy of Luxembourg
Phone: + 352 266 366 1
Fax: + 352 266 366 01
E-mail: info(at)gagfah.com
Internet: www.gagfah.com
ISIN: LU0269583422, LU0269583422
WKN: A0LBDT
Listed: Regulierter Markt in Frankfurt (Prime Standard);
Freiverkehr in Berlin, Düsseldorf, Hamburg, München,
Stuttgart
End of News DGAP News-Service
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