JULY 2013 MRM Newsletter Shareholders, investors, analysts In this issue of the MRM Newsletter: Dear readers and shareholders, Q Interview with Jacques Blanchard, Chief Executive It is with pleasure that I am writing to you for the first time in the MRM Officer of MRM Newsletter and have the opportunity to outline the new prospects opening up for your company. Q Recapitalisation of MRM and restructuring of its balance MRM’s successful recapitalisation operation and the arrival of SCOR SE sheet as majority shareholder were made possible thanks to the support of MRM Q MRM’s new governance shareholders and the participation of its bondholders. The interests of all parties concerned - including existing shareholders before the completion of the recapitalisation operation, bondholders turned into shareholders and SCOR SE - have now been aligned. For more information: Press releases of 29 May 2013 Coupled with the restructuring of the company’s bank debt carried out at the same time, the recapitalisation operation allowed us to reduce Q Successful recapitalisation MRM’s gearing significantly and improve its financial structure. I would like operation for MRM with to praise the work done by MRM’s Board of Directors, as well as the SCOR SE becoming energy applied by Jacques Blanchard in achieving this result. shareholder with a 59.9% stake On 29 May 2013, the Board of Directors met for the first time in its new configuration. New governance Q Appointment of François de principles have been adopted, including in particular the separation of the roles of Chairman of the Board Varenne as Chairman of and Chief Executive Officer of MRM, as well as the creation of a Strategic Committee. The Board also approved MRM’s Board of Directors the strategy for refocusing MRM’s business activities on the ownership and management of retail properties. The implementation of this strategy has been assigned to Jacques Blanchard, who remains a Director of the company and has been confirmed in his position as Chief Executive Officer. Regarding operations, MRM and its subsidiaries have signed a new asset management agreement with CBRE About MRM Global Investors for a period of three years. The company will continue to rely on the teams at CBRE Global Investors, but with a scope of intervention in keeping with MRM’s new governance and with a payment structure MRM is a listed real estate investment that has been revised downwards and tailored to its new strategy. company with a property portfolio € Looking ahead, MRM can count on its stronger shareholding structure, centred around SCOR SE, which worth 269 million (excluding transfer will also provide its expertise in real estate asset management. MRM can also count on its stronger taxes) as at 31 December 2012, governance. With its improved financial structure, MRM now has the means to implement its new strategy comprising retail properties (57%) for improving returns. and office properties (43%). Since 29 May 2013, MRM’s main shareholder I would like to thank you for placing your trust in us. has been SCOR SE, holding a 59.9% stake. On the same date, MRM and its subsidiaries have concluded a new real estate asset management François de Varenne agreement with CBRE Global Chairman of MRM’s Board of Directors Investors. MRM is listed in Compartment C of NYSE Euronext Paris. MRM opted for SIIC (French REIT) status on 1 January 2008. Interview with Jacques Blanchard, Chief Executive Officer of MRM With the arrival of SCOR SE as shareholder and the restructuring of its balance sheet, MRM is planning to implement a new strategy. What are the key principles of this strategy in terms of real estate? Jacques Blanchard: Our strategy is to refocus MRM’s business activities on retail properties and to implement a disposal plan for our office assets. In this context, our priorities are to continue to enhance the value of our BREAKDOWN OF portfolio and secure rental income. With an occupancy rate of over 90%, MRM’S SHARE CAPITAL our retail property portfolio constitutes a solid revenue base, while also offering potential for value creation. In this respect, we intend to launch AFTER THE RECAPITALISATION certain value-enhancement programmes that we have on the agenda. Our OPERATION office portfolio includes more vacant areas and we are actively continuing (before warrants exercise) with our letting activities. In order to complete it under optimum conditions, our our plan to sell office properties will be pursued gradually over the next 8.0% three years. In order to handle all this effectively, we shall continue to benefit from the expertise of the teams at CBRE Global Investors and their in-depth knowledge of our properties. On a financial level, how are things looking for the future? 32.1% 59.9% J.B.: We already benefit from a restored cash position. As regards the outlook, we can count on lower financial expenses relating to the reduction of our debt, as well as lower operating costs. Our cash position and outlook for positive net operating cash flow generation will enable us to look to SCOR SE making new investments. Our plan will be calibrated by taking account of the pace at which we complete office properties disposals, which will also Former bondholders contribute to financing new investments. As regards our commitments, Shareholders before the maturity of most of MRM’s bank debts has been extended to 2017. recapitalisation operation What are your next communications? J.B.: Half-year results are due to be released on 1 August 2013. This will provide the opportunity to report MRM’s consolidated balance sheet following the recapitalisation operation. About SCOR SCOR, the top-five global reinsurer, has a balanced business model with three powerful growth engines: • Life reinsurance (SCOR Global Life); • Non-Life reinsurance (SCOR Global P&C); • Asset management (SCOR Global Investments). 2012 key figures • 2,150 employees in 37 locations across all 5 continents • Premium income: €9.5bn • Equity: €4.8bn • Total assets: €32.6bn • Net income: €418m • Market capitalisation: €4.5bn (as at 15/07/2013) • Total investments, including funds withheld by ceding companies: €22.2bn • Credit rating A+ Galerie du Palais, place Jean-Jaurès, Tours (37) On 9 July 2013, MRM moved into the SCOR building Chief Executive Officer Jacques Blanchard, Chief Financial Officer Marine Pattin and their team have moved into the SCOR building at 5 avenue Kléber in the 16th arrondissement of Paris, which is now the new address for MRM’s head office. News In accordance with the investment agreement signed on 7 March 2013 with Successful SCOR SE, the operation carried out on 29 May 2013 resulted in SCOR SE acquiring a majority stake in MRM’s share capital of 59.9%, thereby giving MRM recapitalisation a high quality reference shareholder. All bondholders tendered their bonds to the proposed exchange operation, as a result of which all €54.0 million of operation bonds issued were converted into MRM shares. € Subscription by SCOR SE to the reserved Allocation of stock warrants to existing + 108.1 m capital increase shareholders before recapitalisation operation Strengthening of SCOR SE subscribed in cash to the capital increase Existing MRM shareholders received a bonus stock (1) MRM’s equity with the cancellation of shareholder’s preferential warrant per share held that can be exercised at the subscription rights reserved for it at a price of same price as the subscription price paid by Number of outstanding shares €2.037477 per share. SCOR SE, from 5 June 2013 to 31 December 2013, (2) at 5 June 2013 The contribution from SCOR SE, which owns 59.9% at a rate of two stock warrants for one new MRM of MRM’s share capital, corresponds to a gross share. 43,665,529 amount of €53.3 million. vs. 3,501,977 shares gCreation of 26,155,664 new shares If all of the warrants are exercised, the total number before the operation of shares would be increased to 45,416,537. Long- Conversion of bonds standing shareholders would hold 11.6% of MRM’s All of the bonds issued by DB Dynamique Financière, share capital. The stake held by SCOR SE would be a wholly-owned subsidiary of MRM, have been reduced to 57.6% and the stake held by former converted into new MRM shares on the basis of an bondholders would be reduced to 30.8%. exchange ratio equal to 0.259406 new share per gPotential creation of bond converted. All bondholders have become 1,750,988 additional new shares shareholders. gCreation of 14,007,908 new shares The restructuring of MRM’s bond and bank liabilities was a condition for Restructuring SCOR SE acquiring a stake in the company. This has allowed for a significant reduction and rescheduling of its debt, as well as the restoration of its cash of the balance position. sheet Bonds of most of MRM’s bank debts has herefore been As a result of the conversion of 100% of bonds and extended to 2017. the payment of capitalised interest in the amount of €8.1 million on 12 June 2013, the bond debt included Debt ratios -€94.9 m in MRM’s liabilities as at 31 December 2012 i.e. The reduction in bank debt resulted in a reduction in Reduction in total debt €62.1 million payable in December 2013 (including the company’s consolidated bank LTV ratio - the (bond debt + bank debt) capitalised interest) was fully wiped out. ratio of bank debt to portfolio value excluding transfer post operation and taxes as valued at 31 December 2012 - from 71.2% restructuring of liabilities Bank debt as at 31 December 2012 to 58.9% (3) after the The maturity of the loans granted by SaarLB and ING operation and restructuring of liabilities.