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KCR Residential Raises GBP3 Million To Expand Property Portfolio (ALLISS)

19th Mar 2018 09:27

LONDON (Alliance News) - KCR Residential REIT PLC on Monday said it has raised GBP3.15 million via issue of 4.5 million shares at 70 pence per share to expand the company's residential property portfolio and reduce overall debt.

The real estate investment company said the placement consists of cash invested into the company, the novation of the rights to a debt and the conversion of part of the company's convertible loan note into equity. The company has raised equity of GBP1.56 million and capitalised loans of GBP1.59 million.

KCR's debt has been reduced debt by GBP1.1 million to 45% of investment property value, with significant reduction in interest cost. Net assets have been increased by GBP2.66 million.

The company plans to use the proceeds to to buy blocks of rented studios, one and two-bedroom apartments at discounts to market value and assets to generate rental and capital growth.

The total new investment in KCR shares consists of an investment by an AIM listed company Energiser Investments PLC of GBP1.7 million, a subscription of GBP300,000 by Consumer Refund Service Ltd for 428,571 shares, and a subscription of GBP50,000 by KCR's Non-Executive Chairman Michael Davies for 71,428 shares.

"This is a very positive step forwards for KCR and puts us in a strong position to acquire the next assets. The investment also represents a vote of confidence in our strategy to build a substantial residential property portfolio that generates secure income flow for shareholders. The combination of increasing revenues through acquisitions and rental growth, reducing debt costs and becoming more efficient as an operating platform moves us closer to being able to pay dividends. We intend to refinance the remaining debt at significantly lower rates and continue to grow revenues through accretive acquisitions from our strong pipeline of investment opportunities," Chief Executive Dominic White said.

Shares in KCR were un-traded at 67p on Monday.


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