LONDON (Alliance News) - Countrywide PLC on Thursday it completed a GBP140 million fundraising to support its reorganisation plans after swinging to loss in the first half of 2018.
The estate agent said investors agreed to subscribe for 1.11 billion shares at a price of 10 pence each, representing an 80% discount to the closing price of 50p on Wednesday.
The stock was trading 63% lower on the day Thursday at 18.58p per share.
In addition, Countrywide said it placed 285.6 million shares at the same price under the proposed placing and open offer.
OCM Luxembourg EPF III Castle Holdings Sarl subscribed for 240.0 million shares for a cash consideration of GBP24.0 million. Following the issue, the fund will hold 19% of enlarged share capital of Countrywide.
Meanwhile, Brandes Investment Partners committed to subscribe for 228.5 million shares for a cash consideration of GBP22.8 million. Following the issue, the company will hold 16% interest in Countrywide.
Finally, Countrywide Executive Chairman Peter Long will subscribe for 2.7 million shares, worth GBP336,158. Following the deal, Long will secure 0.2% holding in the company.
Early on Thursday, the company said it expects to secure GBP129 million from both firm placing and placing and open offer after expenses to repay about 60% of its debt.
"The capital refinancing announced today is a significant milestone for the group," said Long. "It will enable us to build upon the progress we have made to date on our three-year recovery plan as we deliver our return to growth strategy."
Long continued: "With well-known and trusted brands, together with our able and dedicated colleagues we have laid down a strong foundation to build upon and I am confident that we will return Countrywide to profitable growth and long-term success."
Countrywide sunk to a GBP242.8 million loss in the six months to the end of June compared to a GBP192,000 profit reported a year earlier. Revenue declined to GBP298.6 million from GBP326.7 million.
The company said its results were hurt by significant impairment charges and strategic, restructuring and financing costs. Exceptional costs incurred in the period amounted to GBP230.0 million, up from GBP2.7 million the year before.
The board considers the business to be split into three main divisions: Sales & Lettings, Financial Services and Business to Business. Countrywide said central head office functions will be reported separately under "all other segments" section.
Meanwhile, in the UK, the company's income from estate agency reduced by 24% year-on-year due to the weaker opening pipeline, while the Lettings revenue decreased by 5% with properties under management down 5.7% at 65,378 from 69,308 in the first half of 2017.
During the period, the overall number of completed mortgages grew by 18% to GBP9.5 billion from GBP7.9 billion, Countrywide said. For the second-half, it expects to hire more mortgage consultants to improve the group's performance in the financial services sector.
The B2B unit delivered a resilient performance in the first-half, with total income of GBP103.7 million being 4.5% below GBP108.6 million reported a year earlier, reflecting a delayed stock releases, longer transaction cycles and land deals taking longer to mature.
Looking ahead, the company said it expects to make continued operational progress in the second-half of the year to achieve its annual guidance.
