8th Mar 2006 07:04
Great Portland Estates PLC08 March 2006 8 March 2006 Great Portland Refinances Debt to Cut Annual Interest Costs Great Portland Estates plc ("GPE") announces a series of measures to enhance theGroup's financing structure by shifting the emphasis away from long-datedsecured debt to medium-dated unsecured debt, while optimising the interest cost. The company is replacing its existing bank facilities with a new £300 millioncommitted facility. Initially committed until 2011, the facility can be extendedby the Group, with the banks' agreement, after the first and secondanniversaries to 2012 and 2013 respectively. The facility has been provided byBarclays, Lloyds TSB, Royal Bank of Scotland, Calyon and Eurohypo at an interestcost significantly below the two previous facilities which have been cancelled. GPE has also signed a new £110 million one year committed facility with Barclaysand Royal Bank of Scotland, which can be extended for a further year at theGroup's option without the need for further bank consent. Separately over the last week, GPE has purchased £62 million nominal or 66% ofthe outstanding issue of its 7.25% debenture stock 2027. The debentures havebeen purchased in the market at a total cost (before accrued interest) of £88million. £32 million nominal now remains outstanding, out of an original issuesize of £100 million nominal. These transactions will benefit the Group by: • Extending the Group's major facility refinancing date from 2009 to 2011/13; • Enhancing adjusted earnings per share and improving interest cover; • Reducing the Group's fully drawn average interest cost by around 40bp pa.; • Increasing NAV per share growth from 2006/07; • Releasing around £100 million of asset encumbrances to improve operational freedom; • Providing tax relief to shelter the Group's expected 2005/06 tax charge; and • Creating additional financial resources to fund the Group's growing development programme and potential acquisitions. As a result of the redemption premium on the debenture purchases, the Group'sadjusted NAV per share will be impacted by approximately 10p (net of taxrelief). The triple NAV (adjusting for marking debt to market and for thecontingent liability to taxation on chargeable gains) will be largely unaffectedby this transaction. Commenting on the above, Timon Drakesmith, Finance Director, said "We are delighted to have gained the support of a high quality banking group whohave committed to refinance our exciting growth plans. We have more than doubledthe Group's facilities, reduced the margin over LIBOR by a quarter and extendedthe maturity of the main facilities until at least 2011. The debenturerepurchase will also create significant financing and flexibility benefits forthe Group." Contacts:Great Portland Estates plcToby Courtauld, Chief Executive 020 7647 3042Timon Drakesmith, Finance Director 020 7647 3034 Finsbury GroupEdward Orlebar 020 7251 3801 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
GPOR.L