West End landlord Shaftesbury has announced plans for a £307m fundraise, with backing from shareholders CapCo and Norges.
Shaftesbury will use the funds to repay debt and loan interest and ready the business for losses in the wake of coronavirus.
It will raise £297m through issuing new shares at 400p each and may boost this by £10m with an offer for subscription.
CapCo has agreed to a £65m investment, buying 16.3m shares, on top of its 80.7m holding. Norges, which holds 25.9% of the company at 79.6m shares, has also committed to 19.5m shares with an £80m investment.
CapCo will fund the investment using existing cash resources, resulting in net debt of £690m and an LTV of 32%, based on 30 June levels. It has over £600m in cash and undrawn facilities and access to over £1bn of liquidity, including its holding in Shaftesbury.
The new commitments would see CapCo’s 26.3% stake diluted to 25.4%. However, Norges will maintain a 25.9% interest.
It follows CapCo’s purchase of Tak Lee’s stake in June for £436m, ending Shaftesbury’s ongoing legal spat with the Hong-Kong based billionaire.
Shaftesbury is seeking to raise net proceeds of between £285m and £294.7m to repay loans and covenant interest and support the business losses for this year.
It will use £100m to repay a fully drawn revolving credit facility, with £65m dedicated to capita expenditure over the next two years, £63m for liquidity and portfolio investment and £45m to fund operating losses and financing costs this year.
Chief executive Brian Bickell said: “The capital raising announced today will ensure the group maintains the financial flexibility and resources to navigate the unprecedented near-term operational challenges caused by the Covid-19 pandemic, and that we will be well-placed to benefit from the gradual return to more normal patterns of life and activity that have always made London’s West End an unrivalled global destination.”
JP Morgan and Liberum Capital are joint bookrunners, underwriters and global coordinators and Lierum is also sponsor.
CapCo is advised by Rothchild & Co on the investment and also by its corporate brokers BofA Securities and UBS.
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