LONDON (Alliance News) - Cairn Homes PLC late Tuesday proposed issuing a substantial amount of new shares through an accelerated bookbuild to raise funds so it can capitalise on the recovering residential property market in Ireland.
The proposition follows from news earlier Tuesday that Cairn had agreed a new four year, EUR150.0 million senior debt facility with Allied Irish Banks PLC, secured against a corporate level debenture, to fund "acquisitions and growth".
Cairn is proposing to issue over 46.9 million new shares to both existing and new institutional investors, which represents a smidgen under 10% of its current issued share capital.
Cairn shares closed up 1.1% to 1.13 euros per share on Tuesday.
The placing price and the final amount of shares that will be issued will be announced once the bookbuild is closed. Based on that closing share price on Tuesday, the placing would raise in the region of EUR53.0 million.
Credit Suisse Securities (Europe) Ltd and Goodbody Stockbrokers are acting as joint bookrunners and have launched the bookbuild immediately.
Since its initial public offering back in June, Cairn Homes has deployed EUR130.0 million of capital and now has 9 sites in its portfolio or contracted to be acquired.
"The company is continuing to see significant investment opportunities and this placing is intended to raise the funds necessary to capitalise on these opportunities and deliver attractive returns for shareholders," said the company.
"The company believes that there is a significant opportunity to capitalise on the recovery of the Irish residential property market by establishing itself over the medium term as a leading Irish housebuilder, constructing high quality new homes with an emphasis on innovation, design and customer service," it added.
Cairn Homes is currently in the "final stages" of bidding for a portfolio of loans backed by land where houses will be built in Dublin, Project Clear, and has a further pipeline comprising around 2,000 plots which are predominantly located in the greater Dublin region, it said.
"The company believes that: its scale; its access to finance; its extensive relationships; and its expertise in developing and building houses, places it in a strong position to deliver superior total returns for shareholders. The net proceeds of the placing will further strengthen the company's balance sheet and provide it with the flexibility to fund future acquisitions and finance the development of new and existing sites," Cairn added.
Cairn added that "strong progress" had been made at its 50 acre Parkside site and at the Albany site, both in Dublin. The company reaffirmed it is on track to hit its targets moving forward.
By Samuel Agini; samagini@alliancenews.com; @samuelagini. Updated by Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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Cairn Homes (CRN)