Songbird Estates increases stake in Canary Wharf
Group to increase the size of emergency rights issue
Saturday 19 September 2009
Songbird Estates is planning to spend £112.5m increasing its stake in Canary Wharf in London, despite only last month hammering out the terms of a rescue rights issue to save the company.
The real-estate group is set to buy the 54 million shares in Canary Wharf owned by the German bank Commerzbank. The buyout will see Songbird increase its stake in the capital's financial district to 69.3 per cent.
"This transaction significantly increases Songbird's ownership interest in Canary Wharf and further demonstrates the commitment to the company by a core set of investors," the chairman, David Pritchard, said.
Songbird's biggest backers – Qatar Holding, China Investments Corporation, Morgan Stanley Real Estate and GF Investments II – have agreed to back an extension to last month's emergency rights issue. The proceeds of the cash call, which was initially intended to raise £825m to repay all of an outstanding £880m loan owed to Citibank, will now also partly finance the buyout of Commerzbank's Canary Wharf shares.
Mr Pritchard conceded last month that without the funding, Songbird would not have been able to repay the loan to Citibank, and "would have faced liquidation or administration".
Under the original terms of the rights issue, Songbird asked shareholders for £550m through ordinary shares, and a total of £275m in preference shares. Songbird said yesterday that it would increase the ordinary share offering to £620m, relying on a debt facility provided by the investors to make up the difference needed to buy the additional Canary Wharf shares.
Ahmad al-Sayed, the chief executive of Qatar Holdings, said: "We fully support Songbird's management in undertaking this transaction, which we believe is a good opportunity for all shareholders. We are therefore increasing our participation in the planned fundraising to ensure its successful completion".
Despite its backing from shareholders, Songbird's investors have endured a torrid 12 months, with the shares losing more than two-thirds of their value.
Broadgate deal: Blackstone takes 50%
British Land has agreed to sell 50 per cent of its Broadgate office portfolio in the City of London to the private equity group, Blackstone.
The real estate company said the sale would free capital to invest in new property projects.
Under the terms of the deal, British Land and Blackstone will create a joint venture: Blackstone will pay £77m for its stake and also take on half of Broadgate's £1.97bn debt pile. British Land's chief executive, Chris Grigg, said the deal fitted the company's plan of balancing its portfolio and freeing up capital to invest in new office and retail property. However, analysts at Evolution pointed out that, "the yield paid – equating to 7.9 per cent including rent-frees – may disappoint". Mr Grigg refused to be drawn on which projects British Land would target, but said that the purchase of a shopping park in the north of England was a "sign of intent". He added that he did not yet expect banks to start selling distressed property assets.
Fracking is turning the US into a bigger oil producer than Saudi Arabia
Missing Malaysia Airlines plane: Details emerge of two young Iranians using stolen passports in search for a better life
Three-quarters of Britons are saying it wrong - the top ten most common mispronunciations
Oscar Pistorius trial: Forensic analyst says athlete 'was not wearing prosthetic legs' when he smashed locked toilet door with a bat
Missing Malaysia Airlines flight MH370: ‘Alright, good night’ – last words from cockpit revealed amid growing confusion
Britain's top vet sparks controversy with call for ban on slashing animals' throats in 'ritual' slaughters for halal and kosher meat products
Exclusive: Impact of immigrants on British workers ‘negligible’
Katie Hopkins continues campaign to become Britain's most hated talking head with poorly timed Bob Crow tweet
No EU referendum under Labour: Ed Miliband to reveal that vote on membership is ‘unlikely’ in next Parliament if party wins power
Grace Dent: Who cares if she spells it Barraco Barner? Gemma Worrall is more employable than some bookish arts graduate
Ukraine crisis: Russia pledges to 'retaliate against sanctions' as Ukrainian president says Crimea vote will not be recognised
- 1 Boy George: Bad karma
- 2 Grace Dent: Who cares if she spells it Barraco Barner? Gemma Worrall is more employable than some bookish arts graduate
- 3 First Kiss video: Filmmaker gets 20 strangers to make out on YouTube with awkward results
- 4 Rampaging elephant smashes up house but then 'saves crying baby trapped under debris'
- 5 Ian Wright breaks down in ITV documentary charting his rise to Arsenal and England striker
iJobs Money & Business
£45000 - £55000 per annum + Bonus and Benefits: Harrington Starr: One of the i...
£57000 - £77000 per annum + Benefits: Pro-Recruitment Group: Top 10 Specialist...
£350 - £450 per day: Harrington Starr: Harrington Starr are currently working ...
£40000 - £60000 per annum: Harrington Starr: Application Support - FIX protoco...