European Listing for Global Switch
Deal with Italian firm provides new capital, listing on Milan exchange

May 31, 2001 -- TrizecHahn Corporation said today that it had secured additional funding and a public listing on the Milan Stock Exchange for its Global Switch unit, which operates 12 carrier hotels, primarily in Europe.
The moves were accomplished through a transaction with Risanamento Napoli S.p.A., an Italian property company, in which TrizecHahn and several partners swapped their ownership in Global Switch for a controlling interest in Risanamento. Those partners include Chelsfield plc, Unicorn Assets Limited and Fassett Limited.
The deal will provide Global Switch additional funding of up to 280 million euros (about $237 million in U.S. dollars) and a listing on the Milan Stock Exchange.
"This is an important step to stabilize Global Switch's shareholder base and provide a public listing consistent with our strategic plan,'' said Christopher Mackenzie, President and Chief Executive Officer. "The transaction validates our investment and provides substantial third party capital to complete Global Switch's development plans.''
TrizecHahn's plans for its telecom-related properties have been closely tracked by many investors in carrier hotels, who have been seeking workable "exit strategies" to recover their substantial capital investments.
The slump in the financial markets has limited the options available to developers of telecom facilities. At IMN's February conference in New York on carrier hotel financing, Wall Street panelists said it was unlikely that any carrier hotel developers would be able to launch initial public offerings anytime soon.
Analysts said real estate investment trusts (REITs) were also steering clear of carrier hotels, and high-yield bond issuers were wary because of the huge existing pool of telecom-related debt.
But several analysts at the conference pointed to TrizecHahn's portfolio of carrier hotels as an important measure of the viability of exit strategies for carrier hotels, saying the Toronto-based firm's visibility and the size of its portfolio made it a good test case.
Lehman Brothers has recently securitized two Manhattan telecom properties operated by Level 3 and Exodus. Only one rating agency, Standard & Poor's was willing to rate the mortgage-backed securities.
The deal announced today by TrizecHahn, which requires the approval of Italian regulators and the Milan exchange, is designed to lay the groundwork for an eventual listing on other exchanges.
"All parties have agreed to use all their reasonable endeavors to achieve an early listing of Risanamento on the London Stock Exchange," TrizecHahn said in a press release that provided additional details of the deal's structure. Final documentation is expected by the end of June, with a projected completion date of October.
Global Switch owns and operates 12 state-of-the-art data centers located in London, Paris, Milan, Madrid, Frankfurt, Amsterdam, Dublin, Sydney and Singapore.
TrizecHahn Corporation is one of the largest public real estate companies in North America, has ownership interests in and manages a high-quality portfolio of 78 U.S. office properties totaling 50 million square feet concentrated in the central business districts of seven major cities.