The embattled £843m Glanmore Property Fund has formed a committee to review the proposed share offer for the company by AIM-listed Ciref yesterday.

It told the Stock Exchange today that a special committee made up of independent directors had been formed to ‘consider the terms of the proposal carefully in light of all circumstances and will make a further statement once it has completed this assessment.

‘In the mean time, shareholders in the company are encouraged not to take any action.

'Notwithstanding the proposal, the capital raising initiative announced by the company on 27 May 2009 will continue until further notice.’

Ciref, said it would offer Glanmore shareholders the opportunity to receive 25 Ciref shares for every one Glanmore share, that would provide ‘enhanced access to future income and significantly greater liquidity.’

In turn, it said that Ciref’s shareholders would benefit from the company enlarging and diversifying its portfolio.

Most crucially for Glanmore’s private investor unit holders, who have been asked to stump up another £95m of equity so that the fund can reduce its debt pile and avoid having to fire sale assets at depressed prices, Ciref said it would raise £120m from a convertible share offer, with which it would reduce the fund’s gearing to 63%.

At its July valuation, it had £194.2m of equity compared to £649m of debt from lenders Royal Bank of Scotland and Canada Life – both of which have waived loan covenant breaches on the condition it raises new equity.

The open-ended fund has suffered from its high gearing combined with pressure from redemptions which has meant the fund’s manager, Deutsche Bank-owned Tilney Asset Management, has postponed redemptions for over a year and half already, and obtained the power to trap investors for up to four more years.