IRSA exits the administration of the Lipstick Building in New York | Business Opening

IRSA announced to the National Securities Commission thatthe administration of the emblematic Lipstick Building will bandon, in New York, and that it will stop facing the cost of renting the land on which the building stands. With this measure, the company led by Eduardo Elsztain will generate an accounting profit of about $ 2.5 billion.

The property, located at 885 New York Third Avenue, It is known because the financier Bernie Madoff had his offices there, sentenced to 150 years in prison for fraud. In 2011, IRSA acquired 14.9% of the company that controls the property at a settlement price of US $ 30 million. Thus, it reached a 49.9% share.

However, the land belongs to the American firm Ceruzzi Properties, in partnership with Shanghai Municipal Investment and SL Green. In April of last year, the Elsztain group company allowed a purchase option to expire for the lot for US $ 521 million.

“It was a business and it is no longer so, that is why the administration is ceded. The owners of the land wanted a rent higher than the rent obtained for the entire building“Sources close to IRSA indicated, adding that what was done was to rescind the lease agreement.

The new building manager will be SL Green, which in addition to being the owner of part of the lot is a partner of IRSA in the controlling company of Lipstick. Now, the Elsztain group company is analyzing the possibility of divesting itself from its stake.

Already in the fiscal year closed on June 30 of last year, IRSA indicated that would continue working to optimize the financing structure of the Lipstick Building. As indicated in the 2019 report, the property represented a loss of $ 2604 million for the company.

“On March 4, 2019, Metropolitan, a subsidiary of New Lipstick, has renegotiated its debt without recourse to IRSA and it has been reconfigured with a balance of US $ 11 million. This debt must be paid on April 30, 2021“, explained the company.

IRSA has been selling assets for some time now. Last week, the American Dow Chemical acquired the Bouchard 710 tower for $ 87.2 million. Before, he had already sold a flat and five garages in the Boston Building, in Catalinas, for US $ 6.7 million, and another two flats at 200 Della Paollera, for which the Industrial Bank paid US $ 16.9 million. .

“Companies are having a lot of problems paying NOs in dollars. And IRSA has strong maturities ahead and needs to be done cash to pay“, indicated sources of the corporate real estate market on the reasons behind these movements.

In addition, IRSA also sold its 26% stake in Israel’s largest supermarket chain, Shufersal. The transaction was closed for an amount of 1,456 million Israeli new shekels (about US $ 426.5 million).

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