Listed property company Redefine International has today announced the terms of a £127.5m capital raising.
The firm, which has been undertaking a long process of restructuring debt in the UK and on the continent, is issuing 490m shares at a price of 26p each.
Some 89m new ordinary shares will be issued through a firm placing with “leading institutions” to raise £23.3m and around 401m new ordinary shares will be issued through an open offer to raise a further £104.3m.
The issue price of 26p represents a discount of 7.5p – around 22.4% – to the closing price of 33.5p a share on 12 September 2012 and a discount of 9.08 pence – or 25.9% – to the company’s fully diluted net asset value, 35.08p a share at its last accounts on 29 February 2012.
A statement from the company, which took over government landlord Wichford, said: “The board remains confident of the group’s long-term growth prospects but, in order to achieve this growth, the group needs to reduce its financial leverage and create a stable long-term capital structure.”
It added that the net proceeds of £122.5m will be used to reduce the group’s financial leverage through the repayment and restructuring of certain debt facilities as a priority and further to take advantage of distressed and/or attractive investments.
The capital raised is “expected to provide a long-term stable capital structure from which a sustainable dividend can be distributed”.
Finally, it added that the offer has the support of the company’s 71.7% shareholder, Redefine Properties International.
Redefine chairman Greg Clarke said: “The launch of our £127.5m firm placing and open offer represents a significant step in the company’s evolution.
“We have achieved considerable success in the restructuring of our finance facilities over the last year which has significantly strengthened the company’s financial position.
“The company is now well placed to initiate this capital raising to further reduce Redefine’s leverage and provide capital to take advantage of distressed or attractive opportunities.
“We are pleased to have secured underwriting or irrevocable commitments for the full £104.3m open offer and are delighted to announce additional firm placing commitments of £23.2m from leading institutions.
“We look forward to applying the proceeds in order to drive the next stage of our growth and deliver value to our shareholders.”
Pinsent Mason advised Redefine.
bridget.o’connell@estatesgazette.com
