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O Twelve Estates Ltd

  • BY: Andrew Hore |
  • POSTED: 14/12/2010 |

O Twelve Estates Ltd intends to raise 37.56m through an open offer and placing at a premium to the market price in order to cut its debt levels.

This share issue will almost quadruple the number of shares in issue. Westbrook Investco will underwrite the placing but this is conditional on it ending up with a majority of the company. The number of shares in the open offer will be reduced if the stake would fall below 50% otherwise. Westbrook Investco will receive up to 600,000 to cover costs and expenses.

The open offer is on the basis of 292-for-100 shares at 10.5p each, as long as the number of shares to be issued is not reduced.

The release of the details of the fundraising sparked a sharp rise in the share price from 8.125p a share to 10p a share which is still below the open offer price. That values the existing share capital at 12.3m.

OTE has been hard hit by the fall in property values over the past three years. The high bank debt has left it with little room to invest in recent years.

The net placing proceeds will be 35.1m and 3.15m will go on arrangement fees for the loan restructuring. Net debt was just under 143m at the end of March 2010.

At the end of March 2010, the net asset value was 11.1p a share, so the 10.5p a share placing and open offer price will be dilutive but not as highly dilutive as it could have been.

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