St Modwen joins cash call trail
Property developer St Modwen yesterday said it had raised £102m in a cash call to reduce debt, avert firesales and stockpile cash for new acquisitions.
The firm, which specialises in regeneration projects in towns and cities across Britain said it would raise £25.9m through a placing and £81.5m through an open offer before advisers took their fees. The group said it had also renegotiated the terms of its £590m debt facility to offer sufficient head room for its current £422m debt pile.
St Modwen said the two-for-one rights issue of 79.6m new shares would be priced at 135p a piece, a 38.4 per cent discount to Wednesday’s closing price.
KBC Peel Hunt analyst Keith Crawford said: “St Modwen’s financing is now effectively bulletproof.”
Both the placing and open offer are fully underwritten by JP Morgan Cazenove and Numis Securities.
Chief executive officer Bill Oliver said: “The favourable terms on which we have secured our revised covenants demonstrate a strong level of support of the company from our banks.”
The Clarke and Leavesley family shareholders, who together hold 41.7 per cent of the company’s current issued share capital, yesterday committed to take up 35.7 per cent of their entitlement.
Earlier this month the total raised by British firms in cash calls hit £18.3bn after a string of property companies all scrabbled to bolster battered balance sheets.
St Modwen said at its most recent results for the period ending 30 November 2008 it had made a loss for the year of £50.7m compared to a £93.7m profit for the same period a year before, following a 14 per cent drop in asset value during the period.