IERE.L Share News (IERE)

Real estate trust Invista European is to raise in the region of £58.27m by means of a firm placing and an open offer of shares. The company will issue 145.69m new ordinary shares at 20p each and 29.14m 9% preference shares with a seven year duration, at 100p each. Each preference share will come with one warrant attached, with each warrant carrying the right to subscribe for a new ordinary share at a price of 29p per share in May and again in November in each of the four years of the warrant's lifespan. The warrants will trade separately from the preference shares. Two thirds of the shares being issued will be offered to existing shareholders on the basis of 85 new ordinary shares at 20p each for every 100 ordinary shares currently held, and 17 preference shares at 100p each for every 100 ordinary shares held.Once the fund raising has been completed, the company intends to pay down its Bank of Scotland (BoS) banking facility by €40m. The remaining funds from the share issue will be used to augment working capital, though the company remains open to the idea of using them to further reduce indebtedness in the future.The terms of the company's BoS bank facility have been revised, while the duration of the facility has been extended by two years. With the company close to breaching the loan to value covenant requirement of its bank facility, BoS has agreed to suspend the covenant until 15 January 2010.As at 30 June, Invista had real estates assets valued at €538.7m and had drawn down €400.5m of its BoS facilities, putting the loan to value (LTV) ratio at 74.4%; prior to suspension of the LTV covenant test, had the LTV ratio gone above 75% in this year, BoS would have been within its rights to foreclose on the loan and take control of the company.