Shaftesbury, owner of most of Gerrard Street in the Chinatown area of London, tapped shareholders for pounds 21m and Southend Property, which recently issued pounds 25m of convertible loan stock, started spending its war chest.
Shaftesbury, which has suffered heavy losses over the past three years, is issuing 24 million shares in a one-for-one placing and open offer at 88p to repair its balance sheet. Shareholders' funds have fallen from pounds 68m to pounds 21m since 1989, while they struggle to support borrowings of pounds 37m.
The company said that it had sold all its development properties and its outgoings were now covered by rental income. It did not intend to undertake any new speculative developments but needed to raise more equity so it could take advantage of the recovery in property values.
The Levy family, which owns nearly half Shaftesbury's shares, will pass up its rights, reducing its holding to less than 25 per cent. Kleinwort Benson has placed the shares.
Southend said yesterday that it had spent the first pounds 5m of the money it raised last month on a portfolio of 2 million square feet of secondary property in 280 buildings in central Liverpool.
Malcolm Dagul, chairman, said: 'For the first time in the 1990s there are clear opportunities in commercial property.'
He described the estate, acquired from the receivers to Charterhouse Estates, as a 'dealing portfolio'. It provides income of pounds 650,000 a year, a yield of 13 per cent.
Southend also announced a drop in pre-tax profits from pounds 3.7m to pounds 1.2m. Earnings per share were 0.1p (2.6p) and the dividend was maintained at 2.73p, giving a full-year total of 4.25p. The shares were unchanged yesterday at 68p.
- More about:
- Liverpool Crown Court
- Stock And Equity Market & Stock Exchange
- Tokyo Stock Market