KCR Residential raising £3.1m through share issue

KCR Residential announced on Friday that it intended to issue around £3.1m by way of an issue of ordinary shares at, or credited as fully paid at, 70p per ordinary share.

The AIM-traded firm said it was proposing to issue 4,434,570 ordinary shares, comprising a fundraising to raise £901,500 before expenses, being 330,714 placing shares and 957,143 subscription shares.

There would also be the issue of 1,800,427 ordinary shares to satisfy consideration payable on the acquisition of Inland Commercial from Inland, the conversion of £650,000 of convertible loan notes into 946,286 ordinary shares at the issue price, and the allotment to Arden of 400,000 ordinary shares.

In addition to the issue of ordinary shares, KCR said it was proposing to adopt new articles to vary the terms of its existing restricted preference shares.

It said the issue price represented a discount of about 20.5% to the closing middle market price of 88p per existing ordinary share on 12 July - the last business day before the announcement of the placing.

“The net proceeds from the fundraising will be used to finance the acquisition of property assets from Inland and other third parties, and for working capital purposes,” the KCR board sais in its statement.

Completion of the proposals remained conditional upon shareholder approval of the resolutions to enable the issue of the new ordinary shares, which would be sought at a general meeting of the company expected to be held on 30 July.