JOHANNESBURG - Sirius Real Estate, the listed operator of branded business parks across Germany, has announced that it planned to raise up to £35million (R587.85m) from a share issue to acquire a portfolio of assets and support its growth strategy.
Sirius said on Tuesday that the shares would be offered to institutional and other investors by way of an accelerated book-build, a short-term, non-promoted offering of new shares of equity in which the book-build is done over one or two days.
It said the placing would be implemented immediately.
The placing of shares was expected to represent about 6percent of the company’s total issued share capital.
The company said it had opted for the capital raise because it had substantially committed the proceeds of the company’s asset recycling, which started in January last year, as well as the equity fund raises completed last year.
Sirius said it had identified further acquisition opportunities offering an attractive mix of stable income and value-added potential.
“The target portfolio of assets comprises a total of five assets which potentially could be acquired for approximately e77m (R1.12billion), including acquisition costs,” the company said.
Sirius’s asset recycling entailed reviewing its portfolio to dispose of mature and non-core assets to free up capital to be used to acquire assets with significant earnings potential.
In its latest annual report, the company said it would focus on acquiring assets with significant vacancy levels.
Stable income
Andrew Coombs, the chief executive of Sirius, said: “The portfolio assets offer an attractive combination of a stable income stream, together with excellent scope to create additional value, and will fit well within our existing portfolio.
“We are therefore pleased to be putting forward this opportunity to shareholders in the confidence that it will support an increase in the total returns Sirius can generate,” Coombs added.
Sirius said that Berenberg, Peel Hunt and PSG Capital were acting as joint book runners for the placing.
It said the number of placing shares and the price at which the shares were to be placed would be agreed by the joint book runners and the company at the close of the book-build.
The company said that Berenberg and Peel Hunt were acting as placing agents and book runners in respect of the UK placing, while PSG Capital was acting as the company’s placing agent and book runner in respect of the South African placing.
Sirius shares declined 5.23percent on the JSE on Tuesday to close at R10.33.