In the recovery of the operator of private residences for seniors Groupe Sélection, the controller PricewaterhouseCoopers recommends the sale of the interests of 25 residences of the Groupe Sélection to its financial partner Revera, despite the low price offered.
The controller recommends starting a particular investment and sale solicitation process (SISP) on the assets with Revera where the floor price is the one under seal.
Sélection placed itself under the protection of the Companies’ Creditors Arrangement Act last November.
The target portfolio includes 25 properties comprising 6,600 housing units managed by Groupe Sélection, including Sélection Laval, Marronniers de Lévis, Cambridge in Pointe-Claire, Sélection Île-des-Sœurs, Sélection Cherbourg and Sélection St-Charles. in Brossard.
Revera is owned by PSP, the asset manager of the Federal Public Service Retirement Fund. The court must approve the offer.
In the portfolio, Revera’s ownership percentage stands at 75% for 17 residences. For 7 residences, Revera owns 50% interests, and Revera owns 85% of one residence. The rest of the holdings belong to Selection.
Revera proposes to acquire the minority shares of Sélection in the 25 residences.
Moreover, the Selection Group, which is not opposed to the block sale of the 25 residences, says it is dissatisfied with the price offered.
What’s more, a valuation prepared by experts Jones Lang LaSalle indicates that the market value of the portfolio has declined by 12% over the past year, due in part to the increase in interest rates which weighs on the value of the asset.
The “significant discount factor” compared to the most recent study on the market value of the portfolio, the PwC report reads, is explained in part by the minority positions of Selection. Not all potential buyers have an interest in acquiring a portion of a property without having control of it.
Despite this discounted offer, the controller asks the court to endorse the agreement reached with Revera because it offers a certain solution in the foreseeable future, which bodes well for reassuring and retaining the residents and employees of the residences. private for seniors. Recall that the monthly operational loss of Selection fluctuates between 7 and 9 million.
Judge Michel Pinsonnault will hear the parties on Tuesday.