24th Nov 2006 07:01
Development Securities PLC24 November 2006 Not for release, publication or distribution in whole or in part in or into theUnited States, Canada, Australia, Japan, or the Republic of Ireland. Development Securities PLC ("Development Securities" or the "Company") Cash Placing at 625p per share raising £23.125 million and acquisition at Curzon Park Birmingham Development Securities, one of the UK's leading property development andinvestment companies, announces today that it is to raise approximately £23.1million, before expenses, by way of a Placing of 3.7 million new Ordinary Sharesat a price of 625p per Placing Share. The net proceeds of the Placing will be principally utilised to fund theCompany's share of the consideration payable for the purchase of the 1.4 millionsq. ft. site at Curzon Park, Birmingham in an equal joint venture with GraingerTrust PLC ("Grainger Trust"). Commenting on the Placing, Roy Dantzic, Chairman of Development Securities,said: "This successful Placing allows the Company to fund its share of thepurchase price of the Curzon Park urban regeneration development site inBirmingham without utilising existing resources, thus retaining additionalflexibility for the future. The Placing also demonstrates the support of bothexisting and new institutional shareholders." For further information:Development Securities PLCMichael Marx, Executive Deputy Chairman and Finance Director Tel: +44 (0) 20 7828 4777 Collins Stewart Europe LimitedChris Wells, Managing Director, Corporate Finance Tel: +44 (0) 20 7523 8350 Media enquiries:The Communication Group plcRichard Evans/Alison Howard Tel: +44 (0) 20 7630 1411 Collins Stewart, which is authorised and regulated in the United Kingdom by theFSA, is Financial adviser and broker to the Company, and will not be responsibleto anyone other than the Company for providing the protections afforded toclients of Collins Stewart or for providing advice in relation to the matterscontained in this announcement or any matter concerning the Placing orAdmission. This announcement may not be distributed, directly or indirectly, in or into theUnited States, Canada, Australia, Japan or the Republic of Ireland. This announcement does not constitute or form part of an offer to sell or aninvitation to subscribe for, or the solicitation of an offer to buy or subscribefor, any securities, including in the United States. This summary should beread in conjunction with the full text of the announcement below. Any indication in this announcement of the price at which Ordinary Shares havebeen bought or sold in the past cannot be relied upon as a guide to futureperformance. No statement in this announcement is intended to be a profitforecast and no statement in this announcement should be interpreted to meanthat earnings per share of the Company for the current or future financial yearswould necessarily match or exceed the historical published earnings per share ofthe Company. Introduction The Board announces today that Development Securities proposes to raiseapproximately £23.1 million, before expenses, by way of a Placing of 3.7 millionnew Ordinary Shares at a price of 625p per Placing Share. Background On 19th September, the Company released its interim results for the six monthsended 30 June 2006 in which the Company announced that pre-tax profits for theperiod were £8.4 million, a 75 per cent. increase over the same period in 2005.NAV per share was 521 pence (2005: 510 pence). In that announcement, RoyDantzic, the Chairman, stated ".....we continue to pursue a number ofinteresting and substantial development schemes both in London and the mainprovincial cities in conjunction with regional joint-venture partners ordirectly on our own." Since the announcement of the interim results, the Company has announced twofurther business wins, namely the appointment of Development Securities asTransport for London partner on the redevelopment of the Hammersmith Car Parksite in West London and the purchase of Compair House, Slough for £7.0 million.Further, earlier this week, the Company gave an update on planning progressregarding residential and other land development sites at Broughton, as well asannouncing Resolutions to Grant planning consent on a pre-let building forCarnival UK in Southampton and on a substantial mixed-use development atOriental City in Colindale, London NW9. Reasons for the Placing The net proceeds of the Placing will be principally utilised to fund theCompany's share of the consideration payable for the purchase of the 1.4 millionsq. ft. site at Curzon Park, Birmingham, referred to below. The Placing is notconditional on the acquisition of Curzon Park being completed. Acquisition of Curzon Park Development Securities and Grainger Trust PLC have jointly acquired the 10-acreCurzon Park site in Birmingham from the Eastside Partnership for £33.5 millionin an equal joint venture. The proposed 1.4 million sq ft mixed use development, with a gross developmentvalue of over £350 million, will comprise approximately 800,000 sq ft of Grade Aoffice accommodation, 400,000 sq ft of residential accommodation, a 180-bedhotel and 30,000 sq ft of retail space. It is intended that the joint venturewill obtain planning consent, deliver £12 million of infrastructure and developthe site in several phases. Development Securities will project manage theplanning, infrastructure and commercial phases with Grainger Trust projectmanaging the residential component. It is anticipated that development on the site will begin in late 2007/early2008 with an overall development programme of up to eight years. The Placing Under the Placing, the Company is proposing to issue 3.7 million new OrdinaryShares at the Placing Price. The Placing has been underwritten by CollinsStewart. The Company will raise gross proceeds of approximately £23.1 million(or approximately £22.3 million net of expenses). The Placing Price representsa discount of approximately 2.8 per cent. to the closing middle market price ofan Ordinary Share on 23 November 2006 (the latest practicable date prior to thisannouncement). As at the date of this announcement, the Company has an authorised share capitalof £25 million divided into 50,000,000 Ordinary Shares of which 37,011,652 fullypaid Ordinary Shares are in issue. The Placing Shares represent just under 10per cent. of the Company's issued share capital immediately prior to the Placingand following completion of the Placing the Placing Shares will representapproximately 9.1 per cent. of the Enlarged Share Capital. The Placing does not require the consent of Shareholders but is conditionalupon: • the Placing Agreement becoming unconditional in all respects and not having been terminated in accordance with its terms; and • Admission becoming effective by no later than 13 December 2006. The Placing Shares will rank in full for all dividends declared, made or paidafter the date of this announcement and otherwise will rank pari passu with theExisting Ordinary Shares. The Placing Shares have been conditionally placed withinstitutional and other investors. Completion of the Placing is subject to certain conditions including thoselisted above. The Placing Agreement may be terminated by Collins Stewart at any time beforeAdmission for, inter alia, a material breach by the Company of the terms of thePlacing Agreement or the warranties contained in it, or on the occurrence ofcertain specified events or of certain force majeure events. Separate applications will be made to the FSA and to the London Stock Exchangerespectively for the Placing Shares to be admitted to the Official List and tobe admitted to trading on the London Stock Exchange's market for listedsecurities. It is expected that Admission will become effective and dealings inthe Placing Shares will commence on 29 November 2006. No application has beenor is being made for the Placing Shares to be admitted to any other recognisedinvestment exchange. Current trading and prospects The Company continues to trade in line with expectations and, as evidenced bythe announcements made by the Company since the interim results were released on19th September, continues to seek to maintain its position as one of the UK'sleading property development and investment companies. The Board's view of theproperty development market as a whole has not changed materially to that setout in the interim results. The Directors therefore view the Company's prospectsfor the remainder of the current financial year with confidence. Collins Stewart, which is authorised and regulated in the United Kingdom by theFSA, is Financial adviser and broker to the Company, and will not be responsibleto anyone other than the Company for providing the protections afforded toclients of Collins Stewart or for providing advice in relation to the matterscontained in this announcement or any matter concerning the Placing orAdmission. This announcement may not be distributed, directly or indirectly, in or into theUnited States, Canada, Australia, Japan or the Republic of Ireland. This announcement does not constitute or form part of an offer to sell or aninvitation to subscribe for, or the solicitation of an offer to buy or subscribefor, any securities, including in the United States. Any indication in this announcement of the price at which Ordinary Shares havebeen bought or sold in the past cannot be relied upon as a guide to futureperformance. No statement in this announcement is intended to be a profitforecast and no statement in this announcement should be interpreted to meanthat earnings per share of the Company for the current or future financial yearswould necessarily match or exceed the historical published earnings per share ofthe Company. Appendix Definitions The following definitions apply throughout this announcement unless the contextrequires otherwise: "Admission" admission of the Placing Shares to the Official List and to trading on the London Stock Exchange's market for listed securities"Board" or "Directors" the current directors of the Company"Collins Stewart" Collins Stewart Europe Limited"Company" or "Development Securities" Development Securities PLC"Enlarged Share Capital" the Existing Ordinary Shares and the Placing Shares"Existing Ordinary Shares" the 37,011,652 Ordinary Shares in issue at the date of this announcement"FSA" the Financial Services Authority"London Stock Exchange" London Stock Exchange plc"Official List" the Official List of the FSA"Ordinary Shares" ordinary shares of 50p each in the Company"Placing Agreement" the placing agreement dated 24 November 2006 between Collins Stewart and the Company relating to the Placing"Placing" the conditional placing by Collins Stewart of the Placing Shares pursuant to the Placing Agreement"Placing Shares" the 3,700,000 new Ordinary Shares to be issued pursuant to the Placing"Placing Price" 625p per Placing Share"Shareholders" holders of Existing Ordinary Shares This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
UAI.LGrainger plc