Capital & Regional Plc - Junction Fund equity issue (UK)

Capital & Regional, the co-investing property asset manager, announces that the Trustee of The Junction Unit Trust ("The Junction") has issued a notice to unit holders to raise around £65 million (approx. €67.12 mln.) in new equity.

Under the terms of the transaction AREA Property Partners is proposing to invest £50 million with the balance to be subscribed by a number of existing unit holders.

Units are expected to be issued at a price of around 18p subject to certain completion adjustments. This represents a discount of around 40% to the March unit price net of the interest rate swaps mark to market adjustment, of 29.7p. The March unit price before adjusting for the mark to market was 40.2p.

The issue, which is expected to close by the end of May, will, on completion, be accompanied by changes in the Fund's banking arrangements designed to increase financial flexibility. These include an increase in the LTV covenant to 90% in the period to September 30, 2010, reducing thereafter, and an extension of the facility to April 2014, or such earlier date as the fund is wound up.

The Junction's banks have agreed to temporarily waive LTV covenant conditions to allow the equity issue to proceed.

Further information on Capital & Regional's intentions on subscription as well as other information about the transaction will be provided with the 2008 Annual Results announcement on April 24, 2009.

Hugh Scott-Barrett, Chief Executive said: "I very much welcome AREA's proposed investment. Once completed, the new equity and the amendments to the banking arrangements will not only strengthen the Junction's financial position, but also enable its experienced management team to concentrate on asset management opportunities and allow the Fund to benefit from the cyclical recovery of the sector over the next four to five years."

Source: Capital & Regional

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