The AIM-listed developer of city apartments, is to go private to raise equity to fund its development programme
A company 75% owned by JER Real Estate Advisors and 25% by Lehman Brothers is paying £12.9m to buy out the 21% of the shares not owned by the founder shareholders and others that comprise a concert party.
Some of the concert party shareholders will sell their shares at the offer price of 122.5p, which will increase JER and Lehman’s stake to 30.7%. Most of the balance will be held by chief executive Stuart Wright, Rossano Mansoori-Dara and Anthony Brooks, who will each own 18.6% of the company.
City Lofts has also entered into a three-year, £18m convertible loan facility with JER and Lehman to fund its working capital needs.
The company said the decision to go private was the need to raise more equity to fund its development programme. ‘The directors believe, and have received advice to this effect, that such funding would not be readily forthcoming from the public market,’ it added.