Shareholders are being offered seven convertible preference shares at 72p each for every five ordinary shares held while holders of the prefs already in issue are being offered one new share for every 2.785 held. The preference shares carry a 5.25p dividend. The ordinary shares rose 10p to 236p and the prefs were unchanged at 85p.
The existing 17.1 million preference shares - issued in 1989 - have a nominal value of 100p so, because new shares cannot be issued at a discount, they will be replaced by shares with a nominal value of 70p - the same as the rights shares.
The directors, who own about 30 per cent between them, will sell some of their rights to finance subscription for some of their entitlement.
The rights issue will leave the group with pounds 812,000 of share capital and pounds 32.2m of preference share capital. Nigel McNair Scott, finance director, said it was decided to issue preference shares because there was less dilution than with an issue of ordinary shares. When the shares convert in 2012, net assets will be diluted by 36 per cent. Helical's shares stand at a 22 per cent premium to prospective net asset value, based on forecasts of about 183p.
The top seven property companies, and a number of smaller ones, have raised more than pounds 1.2bn this year, while institutions are keen to put more than pounds 2bn into the market. Helical says it will use the money to buy high-yielding properties and for trading. Initially, however, it will cut borrowings from 1.5 times to about 90 per cent of shareholders' funds.
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