5th Feb 2014 07:39
LONDON (Alliance News) - British Land PLC Wednesday said it plans to increase its shareholding in specialist retail park property group Hercules Unit Trust to 54.2% from 49.2% in a deal which will cost it GBP41 million. It said this holding could rise even higher.
Hercules' portfolio comprises 17 retail parks across the UK including Glasgow Fort Shopping Park and 50% of Fort Kinnaird Shopping Park, Edinburgh.
The property developer said it had agreed to purchase GBP41 million of additional units in the Jersey property unit trust, which has a portfolio worth GBP1.5 billion, at a price of GBP613 per unit, 3.8% below its most recent net asset value, as part of a scheduled pre-emption process.
As a result of British Land increasing its interest over the activities of Hercules, the property unit trust will be treated as a subsidiary and consolidated within British Land's accounts from March 31. This includes Hercules' debt, all of which is non-recourse to British Land.
The property investor said its consolidated loan to value ratio (LTV) will rise by a maximum of 0.7 percentage point to 43% and its statutory LTV will rise by a maximum of 3.4 percentage points to 31%.
British Land has also submitted an application to Schroder Property managers Ltd, the manager of Hercules to acquire up to GBP35 million of further units in the firm which have been tendered as part of this process.
The firm said it cannot be certain as to how many units it will be successful in acquiring in the tender process above its pre-emptive allocation.
An update providing details of the value of the units acquired and the balance sheet affects will be made once the number of units acquired is confirmed, British Land added.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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