Workspace Group is set to be the first listed property company in the downturn to raise new capital to avoid breaching banking covenants.
The provider of flexible business space in London is aiming to raise more than £75m from a sale of new shares, which could be a rights issue, open offer or a placing. It is being advised by its broker Panmure Gordon.
The type of share sale may depend on the attitude of Workspace’s largest shareholder, Jack Petchey, who owns 21% of the shares in three separate companies.
‘The board confirms that it is considering a range of options including a potential equity raising,’ Workspace said on Wednesday. ‘The company is also in discussions with its lending banks to increase the flexibility provided by its existing debt facilities. However, no formal decision on any course of action has been taken at this stage.’
Workspace’s shares fell by more than a third from 81p on Thursday last week to 52p today, as word began to get out of the equity raising.