17th Oct 2013 09:52
LONDON (Alliance News) - Property company Redefine International PLC Thursday said it has restructured its debt with Aviva Commercial Finance and exchanged contracts to buy the Weston Favell Shopping Centre in Northampton as part of the deal, sending its shares to a five-year high.
In a deal that will cut its loan to value ration to about 57.3% from 63.7%, the company said it will repay the debt secured against the West Orchards Shopping Centre in Coventry using GBP37 million in cash from its reserves. It will also cut the debt secured against Grand Arcade Shopping Centre in Wigan by about half to GBP73 million by paying Aviva GBP7 million and giving it the right to half the income and capital growth generated by the centre.
Redefine will get full ownership of the Wigan centre, and will have the right to "buy-back" the profit share for a maximum cash payment of GBP18.5 million in five instalments as the valuation of Grand Arcade increases by certain agreed benchmarks.
It said contracts have been exchanged to buy Weston Favell in Northampton for GBP84 million, with Aviva providing it with a financing facility of GBP50 million and the rest coming from cash reserves.
The interest rate on the new Aviva facility will be fixed at about 5.7% a year and the loan will be repayable in November 2038. It will be cross collateralised with other facilities Aviva has provided for Redefine's Birchwood, Warrington, and Byron Place, Seaham, centres as well as the remaining debt on Grand Arcade, Wigan.
"This Transaction not only produces a reduction in the Company's see through leverage ratio, but is expected to be earnings accretive from day one," Redefine Chairman Greg Clarke said in a statement. "The Weston Favell Shopping Centre is dominant in its local area and will benefit from our long term focus on delivering income through focused asset management activity."
Redefine shares were up 2.3% at 49.88 pence Thursday morning, the highest level for five years.
By Steve McGrath; [email protected]; @stevemcgrath1
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