FINANCE: Picton Property Income has proposed a placing programme to raise up to £100m to fund future acquisitions.
The list trust initially plans to issue up to 59.3m shares at 59p a share to raise gross proceeds of up to approximately £35m.
This issue price reflects a 4.7% premium to the firm’s 31 March NAV per share of 56p to ensure the capital raise is accretive to the prevailing NAV for existing shareholders.
It is at a 4.5% discount to the closing share price of 61p as at 30 April 2014.
Following the placing of shares in November 2013, which raised gross proceeds of £11.9m, Picton has made acquisitions of property worth more than £51m and the proceeds have been fully utilised.
Picton said the initial offer will provide it with additional capital “to enable it to take advantage of current investment opportunities and make further investment in the company’s existing investment portfolio”.
Of the £33.8m net proceeds from the initial raise, approximately 75% is expected to be invested in property acquisitions with the remainder to be invested in opportunities within the existing portfolio as well as for general corporate purposes
It added that the proposed placing programme “is to enable the company to raise additional capital as and when it identifies properties that are suitable for acquisition.”
“This should, in turn, enable the investment manager to act opportunistically, by making a series of accretive property acquisitions whilst also mitigating the risk of cash drag on shareholders’ funds.”
Picton chairman, Nick Thompson, said: “It is important, given the current level of activity in the UK real estate market, to be able to deploy capital quickly to secure available opportunities. This disciplined approach and phased structure of the placing programme provides Picton with the flexibility to make acquisitions while maximising the overall income profile of the Company and mitigating the risk of cash drag on shareholders’ funds.”
Picton chief executive, Michael Morris, said: “The proceeds from this latest capital raising will be used to acquire income accretive properties and to invest further within the existing assets as we continue the process of reshaping Picton’s portfolio.”
