Ross buys into Big Yellow’s share placing
SELF-storage company Big Yellow Group said yesterday it successfully completed a £32.9m share placing to exploit low property market prices and fund the development of several new sites.
The group said it placed 11.5m new shares at 285p, a 5.6 per cent premium to Friday’s closing share price and a sharp contrast to the deeply-discounted rights issues that larger landlords have been forced to launch to bolster balance sheets. JP Morgan Cazenove acted as sole bookrunner.
Chairman Nicholas Vetch said: “The placing proceeds provide us with the financial firepower to build out our existing development pipeline over the next two to five years and take advantage of the current adverse conditions in the property market.”
David Ross, the flamboyant former chairman, will contribute around £250,000 towards the equity raising. Ross resigned from the group last year after it emerged he used company shares as collateral against loans. He was later cleared of any wrongdoing and it transpired that a number of other company directors had acted similarly.
Ross, who holds a 9.92 per cent stake in the firm, chairman Nicholas Vetch and other directors of the company are believed to be investing a total of £680,000 in the placing.
Ross co-founded retailer Carphone Warehouse with Charles Dunstone.
Big Yellow, which has 54 stores, yesterday reported it had swung to a pre-tax loss of £71.5m for the year to 31 March, against a profit of £102.6m a year ago. The loss was mainly due to the reversal of revaluation gains booked in the previous year, it said.
Vetch added he was beginning to see grounds for “cautious optimism” in terms of a market recovery.