St Modwen hopes to raise £100m from bond
DEVELOPER St Modwen is attempting to diversify its funding sources through the release of a retail bond. The firm hopes to raise up to £100m.
The Birmingham regeneration specialist and listed company launched 6.25% sterling bonds due 2019. They are available to retail investors.
The firm has a UK property portfolio which is valued at £1.1bn, made up of 5,800 acres. The portfolio is split into income-producing investments, residential land and commercial land and development.
But it also has debts of £370m and believes the bond is a useful way of raising cash without going cap in hand to the banks.
Bill Oliver, St Modwen’s chief executive, said: “We are delighted to announce the launch of St Modwen’s first retail bond. With significant headroom on our existing debt facilities, the retail bond will provide St Modwen with more diversity in its funding sources, without increasing our gearing.”
The bonds will pay a fixed rate of interest of 6.25% per annum, payable twice yearly on May 7 and November 7 with the first coupon payment being made on 7 May 2013 and the bonds maturing on November 7, 2019.
There is a a minimum initial subscription amount of £2,000 and in multiples of £100 thereafter. The offer period is expected to close at noon on October 31, 2012.
Meanwhile, St Modwen is preparing plans for a £20m, residential-led, mixed-use redevelopment of a former Stoke-on-Trent manufacturing facility.
The plans for the 11.25 acre site fronting Shelton New Road will include around 110 high quality family homes plus a local centre incorporating a small convenience store, a parade of four small shops and a public house and restaurant.
It is estimated that at least 220 jobs will be generated with the construction of the houses and 75 permanent jobs will be created at the pub, restaurant and shopping facilities.
The site was formerly used by Dyson Industries to manufacture ceramic heat-resistant products and became surplus to requirement following a restructuring of the business some years ago. IPS Ceramics Ltd, which occupies a small part of the site, will be relocating locally as part of the plans.
