MRV&Co has closed another sale of Resia assets, prioritizing deleveraging and reducing financial risks, despite seeing signs of improvement in the US multifamily market.
The company announced on the evening of Thursday, August 6, that it had entered into individual agreements for the sale of its latest legacy project, the Memorial, located in Atlanta, as well as five plots of land, for a total value of US$170 million.
According to MRV, the sale of the Memorial occurred before its stabilization, while the divestments of the land were carried out below their book cost, without recovering the capitalized interest and expenses related to the projects.
The decision to proceed under these conditions was made to "contribute to the company's cash generation strategy and accelerate deleveraging," according to a statement to the market.
The transactions will represent a total reduction of US$141 million (R$719 million) in debt, but will result in an impairment of US$61 million in the second quarter results, scheduled to be released on August 12.
Combined with the asset sales already announced throughout the year , these transactions will bring the total reduction in net debt to US$290 million (R$1.5 billion).
In 2024, MRV announced that it would make changes to Resia , after the operation had been responsible for a considerable cash burn and an uncomfortable leverage for the Menin family 's construction and real estate development group.
The United States is experiencing a challenging time for real estate development, with interest rates at high levels and the possibility of further increases. Furthermore, the net operating income (NOI) of projects has not yet stabilized due to occupancy and rents below potential.
Faced with this scenario, MRV decided to sell a series of developments and put the operation into "hibernation," without developing new projects.
In a note to clients, Itaú BBA assessed the asset sale as a positive step, but believes there is still insufficient evidence for a more constructive view on MRV's shares.
According to analysts, the operation reinforces the company's strategy of monetizing assets and advancing the restructuring process of Resia. However, since the individual values attributed to each property sold were not disclosed, the bank states that it cannot compare the proceeds obtained with the assumptions of its valuation model.
Analysts point out that, given weaker prices for Resia's assets, they estimate that the restructuring of its US operations will be completed with a net residual debt of approximately US$170 million.
Despite MRV's shares accumulating a 41% drop this year and trading at an attractive multiple of 3.5 times projected earnings for 2027, Itaú BBA maintained its neutral recommendation.
MRV shares closed Thursday's trading session down 2.97%, at R$ 4.57. The company's market capitalization totals R$ 2.6 billion.
