Merivale agrees funding
MERIVALE Moore, the property company, has found an alternative to making a cash call to strengthen its balance sheet by striking a deal with Warner Estate Holdings, writes John Shepherd.
Warner is selling a pounds 6m portfolio of high-street shops to Merivale, which will fund the purchase through an issue of 3.5 million shares at about 90p each and in cash. The share issue will give Warner a 20.5 per cent stake in Merivale.
Grenville Dean, chairman of Merivale, said: 'My company's recharging itself. A few months ago we were tempted to have a rights issue but the stock market became a bit wonky. This has the same effect as a rights issue. And we wanted to issue equity to somebody who could give something back.'
Merivale's gearing - debt as a percentage of shareholders' funds - will fall from 180 to 150 per cent.
Merivale's shares closed 11p up at 76p.
Subscribe to Independent Premium to bookmark this article
Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies