June 1, 2017 / 12:16 PM / 2 months ago

UPDATE 1-Russia's O1 group to bid for Immofinanz Moscow assets -sources

2 Min Read

* Sale or spin-off condition for planned Immofinanz-CA Immo merger

* Immofinanz wants to close deal by year-end (Recasts with O1 group interested in portfolio, adds details)

VIENNA/MOSCOW, June 1 (Reuters) - Russian investment group O1 is looking to bid for five Moscow shopping centres Austrian real estate company Immofinanz is in the process of selling or spinning off, two sources with knowledge of the matter said on Thursday.

Austrian property group Immofinanz told shareholders on Thursday it plans to close the delayed sale or spin-off of its Russia portfolio by the year-end. The move is a precondition of its planned merger with rival CA Immo.

A weak rouble had forced Immofinanz to offer rent reductions to its Russian tenants, who would otherwise have struggled to pay their dollar-denominated rents, weighing on Immofinanz's results.

Immofinanz said earlier this year it would invite bids from around 25 "pre-qualified" parties which have expressed an interest in the five Moscow shopping centres.

The portfolio had a book value of just over 997 million euros ($1.1 billion) at end-March, including 698 million debt.

O1 Group, which the two sources said has received an invitation from Immofinanz to tender, sold its 26 percent stake in CA Immo to Immofinanz last year.

Immofinanz plans to resume detailed merger talks with CA Immo, on hold until the Russia portfolio has been dealt with, in "late summer", it said in a presentation to shareholders.

CA Immo has said Immofinanz must sell or spin off the Russian assets, which have weighed on its results for years, or risk the collapse of the planned merger.

O1 declined to comment. ($1 = 0.8912 euros) (Reporting by Shadia Nasralla in Vienna and Olga Sichkar in Moscow; editing by Jason Neely and David Evans)

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