St. Modwen announces today its intention to place up to 20,016,057 new ordinary shares of 10 pence each in the capital of the Company.
The Group operates across many sectors of the property market, via a network of seven offices and a residential business and through joint venture or collaboration arrangements with public sector and industry-leading partners.
The Group's £1.1 billion (approx. 1.28 billion) property portfolio and its actively managed land bank of development opportunities comprising more than 5,800 developable acres are located in the UK. The Group is focused wholly upon regeneration and the long-term development of commercial and residential property, and has a 25 year track record of adding value by managing schemes through the planning process, remediating contaminated land and pursuing an active program of asset management and development.
The proceeds of the Placing will be used to fund, in part, St. Modwen's share of the development of the New Covent Garden Market ('NCGM') site, by way of its joint venture with VINCI Investments Limited ('VINCI'), VSM (NCGM) Limited ('VSM'), and will allow the Company to exploit the potential of the first development site of approximately 10 acres (the 'Northern Site'). NCGM forms part of the regeneration of the Nine Elms area, one of Central London's key mixed use development areas.
Key highlights of the NCGM project:
- The 550,000 ft² (approx. 51,100 m²) new wholesale market development is expected to cost between £150 (approx. 174 million) and £200 million (approx. 232 million) to develop; St. Modwen's share of this development cost is expected to be 50%;
- in return for building the new market facilities, 20 acres of surplus land, including the Northern Site, will be released to VSM as part of the conditional development agreement with the Covent Garden Market Authority ('CGMA');
- the NCGM project has a gross development value of approximately £2 billion (approx. 2.32 million), and is a prominent, planned Central London residential scheme comprising 2,800 new homes and 115,000 ft² (approx. 10,700 m²) of commercial accommodation; and the NCGM project is a major part of the Nine Elms regeneration area, close to the new U.S. Embassy and to the existing Vauxhall tube station.
The Placing proceeds will enable St. Modwen to exploit the potential of the NCGM site without the need to increase debt leverage on the Group's balance sheet, and allowing it to use existing resources to fund other developments and major projects.
Members of the board of directors of the Company (Bill Oliver, Michael Dunn, Steve Burke, Bill Shannon, Kay Chaldecott and John Salmon) intend to subscribe for, in aggregate, approximately £200,000 (approx. 232,000) of new ordinary shares of 10 pence each in the capital of the Company in connection with the Placing.
Commenting on the Placing, Bill Oliver, St. Modwen's Chief Executive, said:
"The redevelopment of New Covent Garden Market represents a landmark project in Central London for St. Modwen, providing us with an opportunity to participate in one of London's most exciting long-term regeneration schemes and to utilize our extensive experience in regenerating complex, brownfield sites.
The proceeds from the Placing will allow St. Modwen to exploit the potential of the development and create value for shareholders without the need to increase the debt leverage on the Group's balance sheet, whilst seeking to ensure the Company has the financial flexibility to deliver its other pipeline projects."
Source: FTI Consulting