Conygar Investment Company to sell property portfolio for £130m

AIM-listed Conygar Investment Company is to sell its investment property portfolio to Regional Commercial Midco (RCM) for £129.8m, a modest premium to the portfolio’s valuation of £129.51m at end of last September.

Conygar is selling the portfolio as it wants to take advantage of the modest premium it gained on the sale price of the valuation of the portfolio, especially in light of the current political and economic uncertainty in the UK and that RCM will assume its obligation to fund the ZDP capital entitlement, which will result in the company being debt free following the sale.

The sale will be satisfied by the issue of 26.32 shares in Regional Real Estate Investment Trust, the parent company of RCM, which represents 8.8% of the trust's share capital, at a price of 106.347p each.

RCM will also assume the bank debt of the portfolio and Conygar's obligation to fund the repayment of the zero-dividend preference shares in January 2019 issued by Conygar ZDP.

The deal is subject to approval of Conygar’s and ZDP’s shareholders and the proceeds of the sale will be used to accelerate the progress of the company's existing development asset portfolio, while also enabling it to seek new investment opportunities.

Conygar chief executive Robert Ware said: "We are pleased to be divesting the investment property portfolio, having added a great deal of value to the portfolio since it was acquired during the years following the financial crisis. We believe that the team's time will be best spent focusing on maximising the latent value of the development pipeline over the coming years.”