Developer Countryside has launched a new shares offer to raise £250m for expansion.
It will do this through placing shares, subscription shares and retail shares, representing 15% of the existing issued capital.
Countryside will use the proceeds to repay its revolving credit facility and then draw down new finance to boost its balance sheet and help fund growth of its partnerships division.
The developer has drawn down £300m of its existing RCF with Lloyds, Barclays, HSBC and Santander. It intends to invest £150m of this RCF in regional development, with £100m to strengthen the balance sheet.
Countryside will spend £50m on eight schemes in the South and £20m to build a second modular factory in Bardon, Leicestershire. Remaining funds will go to new regions, with £30m in south London, £25m in the Chilterns and £25m in the South West.
Countryside is creating two new partnerships divisions, splitting the current North department into North – covering Manchester, Merseyside and Yorkshire – and Midlands, incorporating the East, West and South Midlands.
It said the new structure would position the company to take advantage of opportunities in the pipeline, with growth anticipated in the medium term. It aims to grow the partnerships business to more than 75% of its operating profit.
The developer expects around £90m to be spent in the 2021 calendar year, with £60m in 2022. This should add £130m to £150m in additional cumulative profits for the three-year period from 2022 to 2024.
It will also continue to focus on PRS and affordable housing to prioritise cash receipts, further strengthening the balance sheet. It had adjusted gearing of 62% at the end of the third quarter, with a target to reach 40% in the next few years, with a goal to return to net cash from September 2023.
Barclays and Numis Securities are acting as joint bookrunners.
To send feedback, e-mail emma.rosser@egi.co.uk or tweet @EmmaARosser or @estatesgazette
