Development Securities eyes £100m rights issue
BRITISH property firm Development Securities yesterday said it planned to raise about £100m through a share placing and rights issue to fund future projects.
The company, which specialises in office and retail development projects, said it would place about 4.1m shares at 250p a piece, a discount of 8.8 per cent to their closing price on Wednesday.
Development Securities will raise the remaining amount through a rights issue of about 36m shares at 250p per share.
The placing is underwritten by Collins Stewart and the rights issue by Barclays Capital and Collins Stewart, the company said.
Chief executive Michael Marx said: “The plan was clearly explained to our shareholders and they have been very supportive. Raising this money means projects can continue and it is incredibly important in these difficult times.
“In general I think property is at about the right price at the moment – not too high or too low.”
The company has been responsible for numerous largescale projects around the UK including in Paddington in west London.
Marx added: “We are not talking about prestige projects in many of cases. Those projects, especially in London tend to go ahead anyway because property in the capital is so attractive.
“It’s the others which become difficult to fund.”
MARK DICKENSON
COLLINS STEWART
The placing is being underwritten by Collins Stewart. Mark Dickenson, head of corporate broking, and Bruce Garrow have been working with Development Securities, assessing the risk of the placing, and generally oiling the wheels to make sure the rights issue happens.
The team at Collins Stewart has also been working in partnership with Barclays Capital – a common approach as companies try to spread risk around, with the economy still spluttering.
The placing is expected to go smoothly, with shareholders won over without any need for a hard sell. Development Securities needs the money to kick new life into projects around the UK and Dickenson and his team have used their expertise to steer the package through when other rights issues have been hit by controversy and the ire of some shareholders.