New Funding and Equity Raising

RNS Number : 6667K

Sirius Real Estate Limited

01 August 2013

 



Sirius Real Estate Limited

New funding and Equity Raising

Sirius Real Estate ('SRE' or 'the Company') is pleased to announce that it has conditionally raised long term financing of €52 million via a secured bond issue and is conditionally raising €6.5 million via a shareholder subscription and placement (the 'Equity Raising').

New funding

Four of the Company's subsidiaries have received commitments from investors to raise €52 million via a secured bond agreement ('Bond'), which is conditional only on admission to the London Stock Exchange's AIM market of the shares to be issued pursuant to the Equity Raising (the 'Admission'). The Bond is secured against three assets which currently form part of the €206.8 million facility with Berlin Hannoversche Hypothekenbank AG ('BerlinHyp').

As part of this transaction, the Company will repay BerlinHyp €56 million upon completion and provide a guarantee to repay a further €4m by 31 October 2013.  On this basis BerlinHyp have agreed to release these three assets, which will initially reduce the BerlinHyp loan to €150.8 million and to €145.4 million after payment of the further €4 million and the normal amortisation due in September.

The Bond is split into a 10 year senior tranche of €45 million with a fixed interest rate of 4%, and no amortisation, as well as a 7 year junior tranche of €7 million which has a fixed interest rate of 6%, and is fully amortised over the term of the facility.  The Bond is secured on three assets with a combined DTZ valuation at 31 March 2013 of €76.8m.

SRE has decided to subscribe initially for €4 million of the more expensive junior debt itself while retaining the flexibility to sell it on to investors in the future, if required. The total arrangement cost (including lender's legals, ratings, valuations and paying agents) for completing the Bond issue is €2,080,000 representing 4% of the funds raised and will be amortised over the term of the facility. 

This bond issue represents the first step in refinancing the BerlinHyp debt facility which expires in March 2014. The Company is in advanced discussions with BerlinHyp and three other lenders to refinance the remainder of the loan on a long term basis.

Equity raising

The Company has received firm commitments and indications for and is raising gross proceeds of €6.5 million via a shareholder subscription and placement. The funds will be used to cover the shortfall on the BerlinHyp repayment and the arrangement costs. With the exception of the bond issue costs this will reduce the Company's overall LTV.

The Equity Raising is to be conducted through the issue of up to 30,952,371 ordinary shares of no par value in the Company ("New Shares") representing up to 9.4% of the Company's issued share capital. These shares are to be issued at a price of 21 cents per share, representing a discount of 6.67% to the prevailing share price, to new and existing shareholders and will rank pari passu in all respects with existing issued shares of the Company including the right to receive all dividends and other distributions declared after Admission.

The issue of the New Shares will be conditional, inter alia, upon Admission becoming effective. It is expected that Admission of the New Shares will become effective and that dealings will commence in the New Shares by 8.00 a.m. on or around 6 August 2013. Assuming that the Company issues the maximum number of New Shares, following completion of the Equity Raising the Company will have an issued share capital of 358,752,371 shares, of which 10,221,824 are held in Treasury. Therefore the total number of shares with voting rights in the Company will be 348,530,547.

The New Shares are not being offered to Shareholders on a pre-emptive basis because the Board has concluded that it is not in the best interests of the Company to make such a pre-emptive offer due to the time and cost involved and the necessity to complete the issue of the Bond in a timely manner.

Karoo Investment Funds I & II, 24.99% shareholders in SRE, have agreed to subscribe for 6,637,074 shares in the Equity Raising and James Peggie, a non-executive director of SRE, Andrew Coombs, CEO of Sirius Facilities and Alistair Marks, CFO of Sirius Facilities have agreed to subscribe for 404,760 shares in the Equity Raising.

CEO, Andrew Coombs, said, "We are pleased to be announcing this new bond issue through which we have secured long term funding for the business on very favourable terms. We are now entering the final part of refinancing the SRE group which, once completed, will allow the business to focus on cash generation and growth opportunities."

Contacts:

Sirius                         

Andrew Coombs, CEO                                                                       [phone]

Alistair Marks, CFO

Peel Hunt

Capel Irwin                                                                                                      020 7418 8900

Novella Communications                                            

Tim Robertson                                                                                                020 31517008 

Ben Heath

 

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