Hansteen Holdings plc (AIM: HSTN) announces that it proposes to raise gross proceeds of £200.8 million (approximately £194.6 million net of expenses) by way of a Placing and Open Offer at a price of 75p per New Ordinary Share (7p - 8.5% discount) to allow it to take advantage of exceptional opportunities to buy industrial properties in the UK. The Placing and Open Offer has been fully underwritten by KBC Peel Hunt.
Summary
Under the Placing and Open Offer, Hansteen intends to issue 267,768,451 New Ordinary Shares, comprising:
o 89,333,334 Firm Placed Shares (representing gross proceeds of £67.0 million), pursuant to the Firm Placing, which have been conditionally placed with institutional investors by KBC Peel Hunt and are not subject to clawback; and
o 178,435,117 Open Offer Shares (representing gross proceeds of £133.8 million) to be made available to Qualifying Shareholders pursuant to the Open Offer, which have been conditionally placed with institutional investors by KBC Peel Hunt, subject to clawback.
The Issue Price is 75p, representing a discount of 7p (8.5%.) to the closing mid market price of 82p per Ordinary Share prevailing on the London Stock Exchange on June 22, 2009 (the last business day prior to the issue of this announcement).
Under the Open Offer, Qualifying Shareholders have the right to subscribe for their pro rata entitlement of Open Offer Shares on the basis of 1 Open Offer Share for every 1 Existing Ordinary Share.
The Placing and Open Offer is being carried out to allow Hansteen to take advantage of exceptional opportunities to buy industrial properties in the UK.
The difficult economic conditions, restricted availability of financing and sharply falling property values currently being experienced in the UK market following a sustained period of rising values and plentiful availability of debt has created a state of considerable distress in the UK property market.
The Directors, therefore, believe industrial property acquisitions can be made at double digit initial yields. This has led the Directors to conclude that there is an outstanding opportunity to create value for Hansteen's shareholders by re-entering the UK industrial property market at this time.
Unlike many of the listed property companies and funds, Hansteen has no current balance sheet constraints and believes it has no need to raise capital or to sell properties at a low point in the cycle for defensive reasons. Hansteen is conservatively geared with substantial headroom on its banking covenants.
As at May 31, 2009, the Group's property portfolio was independently valued at 495 mln. (excluding development land). This represents only a 2.75% decline relative to the portfolio value as at December 31, 2008 of 509 mln. (excluding development land).
The existing portfolio has a diverse spread of tenants, low capital values and rents, a high current yield of over 8.75% and a reversionary yield of 10% reflecting the opportunities to add value to a number of the properties.
Morgan Jones and Ian Watson have irrevocably committed to apply for Open Offer Shares pursuant to their Open Offer Entitlements amounting to 1,071,799 Open Offer Shares each.
The Placing and Open Offer has been fully underwritten by KBC Peel Hunt subject to and in accordance with the terms of the Placing Agreement.
To reflect the increased size and scope of the business, Hansteen intends to apply to move to the Official List within the next 12 months.
A General Meeting of the Company is being convened for July 9, 2009 at which the Resolutions for the purpose of effecting the Placing and Open Offer will be proposed.
If the Resolutions are passed and the other conditions to the Placing and Open Offer are satisfied, it is expected that dealings in the New Ordinary Shares will commence at 8 am on July 10, 2009.
Morgan Jones, Joint Chief Executive of Hansteen said: "The UK property market is in a state of considerable di
