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ProLogis Gets Cash From Asset Sales To Reduce Debt

The Associated Press

DENVER (AP) — Distribution-facility owner ProLogis, a real-estate-investment trust, said Tuesday it has received a total of more than $1.3 billion in cash from previously announced asset sales that will help pay down debt.

Those sale proceeds, and an additional $140 million from another pending transaction, will allow the company to make "substantial progress toward our goal of de-leveraging our balance sheet by $2 billion by the end of 2009," Chief Executive Walter Rakowich said.

All three major ratings agencies downgraded ProLogis' debt ratings late last year, although the Denver-based REIT's primary ratings remain at investment-grade levels. In November, ProLogis announced a series of steps to reduce debt and expenses.

ProLogis said Tuesday it has received $845 million in cash from its sales of industrial distribution properties in China, and the remaining stake in its Japanese property funds. Those assets were sold to affiliates of GIC Real Estate, a Singapore government-owned real estate company, in transactions announced in December.

Including assumption of liabilities, the total cash consideration from the deals is nearly $1.35 billion, ProLogis said.

"Proceeds will be used principally to reduce debt," ProLogis said.

In addition, the previously announced $140 million sale of another distribution facility in Japan to GIC Real Estate is expected to be completed within 30 days, with the related gain to be realized in the second quarter.

ProLogis also said Tuesday it has completed a three-year extension of one of its debt obligations that will reduce the loan by $60 million.

"With our recent fund financing activity, we have addressed over 50 percent of 2009 fund-related maturities," Chief Financial Officer William Sullivan said.

Shares of ProLogis 1 cent to $6.89 in morning trading. The stock has ranged from $2.20 to $66.58 over the past year.

ProLogis leases industrial facilities to more than 4,500 customers, with more than 475 million square feet of industrial space in markets across North America, Europe and Asia.