Mark Cooper and Selina Mills
Outlet centre developer Freeport issued its third rights issue in five years this week in a bid to raise £49m for its continental development programme.
The two-for-seven issue at 430p per share is at a 15.3% discount to the closing price of 507.5p per share prior to the announcement. The firm’s share price fell 17.5p to 490p on the back of the news.
Sean Collidge, chief executive of Freeport, said the group had looked at alternative ways to fund the continental European development programme but did not want to overextend gearing.
Freeport is developing centres in Portugal, France and the Czech Republic.
“The rights issue, combined with new banking facilities, will provide the requisite capital structure for Freeport going forward. We want to grow, but not too fast,” he said.
The group has also formed The Freeport Limited Partnership, which will allow external investors to co-invest in its outlet villages at Braintree, Castleford, Fleetwood and Hornsea.
The expected £95m released from the LP, in which the firm will retain a 20% stake, will also fund continental development.
Freeport plans 10 UK sites and 20 on the Continent.
Collidge said the group was also hoping to create a pan-European limited partnership in two to three years.
Analysts were disappointed with the rights issue. One said: “While this does give them more capital to expand, they are diluting their equity base.”
Freeport also reported its interim results. Diluted net asset value per share rose 2% to 554p (30 June 2001: 545p). Pretax profit for the six months to December rose 16% to £5.4m (2000: £4.7m).
” Merril Lynch resigned this week as joint broker to Freeport.
