Under the terms of the agreement, TrizecHahn will receive 11.4 million new Chelsfield shares in exchange for its investment in Global Switch, and another 8.1 million shares in exchange for an existing $36 million loan from TrizecHahn to Chelsfield. This will leave TrizecHahn holding approximately 6.9%of Chelsfield's equity.
TrizecHahn President and CEO Christopher Mackenzie said: 'We're pleased to have reached this agreement. Following conclusion of the sale to Chelsfield, we will have eliminated all direct exposure to Global Switch, and we will be further able to focus on our core U.S. office portfolio. Because Chelsfield is one of the leading operators in the U.K. real estate market, we are optimistic that this will be a profitable investment for us.'
At the same time Chelsfield has bought out the remaining 5.6% stake held by the Italian developer Risanamento Napoli. And it has installed Andrew Vander Meersch as Chief Executive of Global Switch. Vander Meersch rose to prominence in the UK when he masterminded the development of Stockley Park at Heathrow, the UK's premier business park.
Global Switch owns 2.8 million sf in eight properties around the world. Six of the properties are operational and produce €70 million ($61 million) per annum. However 30% of this income comes from a contract with Global Crossing, which recently filed for Chapter 11 protection. A second London centre of 500,000 sf is under construction in East India Dock, with completion due in June 2002.
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