St Modwen joins cash call trail

Property developer St Modwen yesterday said it had raised &pound;102m in a cash call to reduce debt, avert firesales and stockpile cash for new acquisitions.<br /><br />The firm, which specialises in regeneration projects in towns and cities across Britain said it would raise &pound;25.9m through a placing and &pound;81.5m through an open offer before advisers took their fees. The group said it had also renegotiated the terms of its &pound;590m debt facility to offer sufficient head room for its current &pound;422m debt pile.<br /><br />St Modwen said the two-for-one rights issue of 79.6m new shares would be priced at 135p a piece, a 38.4 per cent discount to Wednesday&rsquo;s closing price.<br /><br />KBC Peel Hunt analyst Keith Crawford said: &ldquo;St Modwen&rsquo;s financing is now effectively bulletproof.&rdquo;<br /><br />Both the placing and open offer are fully underwritten by JP Morgan Cazenove and Numis Securities.<br /><br />Chief executive officer Bill Oliver said: &ldquo;The favourable terms on which we have secured our revised covenants demonstrate a strong level of support of the company from our banks.&rdquo;<br /><br />The Clarke and Leavesley family shareholders, who together hold 41.7 per cent of the company&rsquo;s current issued share capital, yesterday committed to take up 35.7 per cent of their entitlement.<br /><br />Earlier this month the total raised by British firms in cash calls hit &pound;18.3bn after a string of property companies all scrabbled to bolster battered balance sheets.<br /><br />St Modwen said at its most recent results for the period ending 30 November 2008 it had made a loss for the year of &pound;50.7m compared to a &pound;93.7m profit for the same period a year before, following a 14 per cent drop in asset value during the period.