Last checked at 26 May 2009 07:00
26 May 2009
CAPITAL & REGIONAL PLC
X-LEISURE FUND EQUITY ISSUE
Capital & Regional PLC, the co-investing property asset manager, announces that the X-Leisure Unit Trust (in which it owns a 19.4% stake and is the property asset manager) has announced its intention to raise around £50 million through an Open Offer to existing unitholders.
The new units are being offered at a price of 10p representing a discount of 72.5% to the unit price (including the mark to market adjustment) as at 31 March 2009 of 36.4p.
The Open Offer is subject to a number of conditions including the agreement of a new financing package with the banking syndicate providing the Fund's main facility. A revised facility agreement providing for a relaxation of the LTV covenants and for the Brighton property to be refinanced within the facility has already been agreed by the banks' credit committees, however further amendments are still being negotiated, including an additional relaxation of the LTV covenant and an extension to the term of the facility. A further LTV waiver until 31 July 2009 from the Fund's syndicate banks is being sought to enable the transaction to proceed.
The equity offering also includes a number of proposals for changes in fund strategy and governance. Proposals are being included to carry out a review of fund strategy at the end of 2012 which will consider ways of increasing the liquidity of units and exit options, together with a proposal to bring forward the initial expiry date of the Fund to either the end of 2014 or 2015, depending upon the advice of the fund manager at the time. Additionally it is proposed to integrate fund management and property asset management services in order to streamline the provision of services to the Fund.
A unit holder vote on the proposals is expected to take place in mid-June and completion is anticipated by the end of July.
It is expected that Capital & Regional will subscribe for units in the offer. A final decision will be taken ahead of the vote in June but the amount subscribed for is not expected to be less than 40% of its pro-rata entitlement.
Further details will be provided as the transaction progresses.
Commenting on the proposals, Hugh Scott-Barrett said: "The announcement of the X-Leisure Fund's intention to raise £50 million by way of an Open Offer is an important step in strengthening the financial position of the Fund."
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For further information:
Capital & Regional
Hugh Scott-Barrett, Chief Executive Tel: 020 7932 8121
Maitland
Martin Leeburn / Emma Burdett Tel: 020 7379 5151