British Land holds £700m rights issue

Published on Thursday 12 February 2009 08:54

PROPERTY company British Land has today asked shareholders for over £700 million to help it recover from the current economic downturn.

The firm today announced a bigger than expected rights issue to raise approximately 740m. The cash will help underpin the company's balance sheet and provide funds for possible acquisitions.

The firm, previously headed by Royal Bank of Scotland chief executive Stephen Hester, will give shareholders the right to subscribe for two new shares for every three held at 225p each – representing a 53 per cent discount to last night's closing price.

It comes as it also announced growing third quarter losses, up to 1.61 billion in the third quarter to December 31, from 1.33bn in the same period a year before.

Underlying pre-tax profit was down 13 per cent to 63 million, with the valuation of its porfolio plummeting by 13.3 per cent in just three months.

The decision to press ahead with a rights issue comes just days after the group achieved a better than expected 587.7m for its 50 per cent stake in the Meadowhall shopping centre in Sheffield.

It also confirmed today that it achieved a 38m sale price when it offloaded Meadowbank Retail Park in Edinburgh in the final months of last year.

In a statement, the company said: "By undertaking a pre-emptive equity issue today, the company is able to maximise its competitive position."