Hammerson wraps up capital raise


Hammerson wraps up capital raise

Published Date: 2020-09-28 | Source: Stephen Gunnion | Author: Stephen Gunnion

Hammerson wraps up capital raise

The London and JSE-listed property development and investment company says the vast majority of shareholders took up their rights.

Hammerson's shares sank on Friday as it wrapped up a capital raise aimed at shoring up its balance sheet. At their worst, the shares were down 24%.

The London and JSE-listed property development and investment company said shareholders representing 94.9% of its stock took up their rights in the 24 for 1 rights issue. JP Morgan Cazenove and Morgan Stanley, the joint global coordinators, placed the remaining 5.1%. The rights issue was priced at R3.41 per share ahead of a share consolidation earlier this month.

The cash call, announced a month ago, raised £552 million. Together with the sale of almost all of its interest in VIA Outlets, the shopping centre owner aimed to raise net proceeds of about £794 million to strengthen its financial position and provide liquidity as it refocuses its property portfolio on flagship destinations in the UK and Ireland. It said debt would reduce to £2.2 billion.

When it announced the capital raise last month, Hammerson said it was proactively taking measures to deal with the substantial impact on its business driven by major structural changes to the retail industry, which had been exacerbated by the effects of Covid-19. Its two largest shareholders, APG and Lighthouse Capital, gave irrevocable undertakings to take up their rights in full.

Hammerson reported a sharp decline in earnings for the six months to end-June and withheld an interim dividend due to the impact of Covid-19, which forced it to close shopping centres and make provisions for reduced collections partly due to amended rental agreements and deferments. Net rental income fell 44% to £87.3m million and adjusted profit dropped 84% to £17.7 million. Its loss tripled to £1.09 billion, from £320 million previously, and its basic loss per share widened to 142.2p from 41.8p, including portfolio non-cash revaluation losses of £939 million.

Its shares retraced some of their losses to close 16% down at R3.90.

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