LONDON (Alliance News) - Sirius Real Estate Ltd on Thursday said it was proposing a private placement of shares to raise up to EUR20.0 million, with funds to be used for further acquisitions and a refinancing of its banking facility.
The business parks operator said the private placement is being conducted through a bookbuild launched on Thursday morning.
Peel Hunt and Canaccord Genuity are joint bookrunners in respect of the UK element of the private placement, and PSG Capital has been appointed sole bookrunner in respect of the South African portion.
The private placement shares will not be eligible to receive the final dividend of 1.30 euro cents for the financial year that ended March 31, Sirius Real Estate said.
Sirius noted that PSG Capital also has been appointed by Clearance Capital Ltd to sell 27.0 million shares in Sirius, including those held by fixed-term real estate securities fund Karoo Investment Fund SCA. Karoo has a scheduled termination date of July 31, and held a 17.9% stake in Sirius on December 31.
Karoo has been distributing its Sirius shares to shareholders, so these shares being sold in the secondary placing are those which Karoo shareholders have elected not to receive, as well as shares held by other Clearance Capital funds. Following the placement, Karoo will no longer hold any shares in Sirius.
The private placement is conditional upon the secondary placement occurring at the same time.
Sirius said it will use the proceeds of its private placement to fund further acquisitions with an all-in cost of EUR55.8 million, of which EUR29.1 million are acquisitions nearing completion and EUR26.7 million are acquisitions still under negotiation. The acquisitions are expected to be acquired with an EPRA net initial yield of 8.1% and would contribute around EUR5.3 million to annualised rental income and EUR4.5 million to net operating income, the company said.
The proceeds also will be used for the refinancing of its existing EUR39.6 million banking facility currently with an interest rate of 2.68% and a three and a half year remaining term, with a new EUR77.0 million seven-year bank facility with an expected fixed rate of around 1.6% with the same lender. This facility will also help fund the acquisitions.
"We are pleased to be able to bring this opportunity to the market as we see significant benefits, both short-term and longer-term, for our shareholders with these transactions. Reflecting the company's ambitions and the interest from investors, the company is making plans currently to seek a main market listing in London and Johannesburg and expects to provide an update on these plans later in the year," said Chief Executive Andrew Coombs.
Shares in Sirius were down 0.5% at EUR0.527 on Thursday.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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Sirius Real Estate (SRE)