Local Shopping REIT (The) PLC Extension of Borrowing Facilities (7669P)
22 November 2016 - 6:01PM
UK Regulatory
TIDMLSR
RNS Number : 7669P
Local Shopping REIT (The) PLC
22 November 2016
The Local Shopping REIT plc
Extension of Borrowing Facilities
The Local Shopping REIT plc ("the Company") announces that it
has extended the term of the two cross-collateralised loan
facilities provided to the Company's property-holding subsidiaries
NOS 4 Limited and NOS 6 Limited by HSBC Bank Plc (the "Loans") by
an additional 20 months. The Company has thereby secured bank
funding through to 31 December 2019.
As part of the revised terms the balance of the Loans will be
reduced by GBP7 million on 30 November 2016 through the release of
cash held by the Company (derived from the sale of properties and
operational income). As a result, the balance of the Loans
outstanding on 30 November 2016 will be approximately GBP43.5
million.
Under the terms of the extension of the facilities, further
property assets valued at GBP1 million will be added to the
existing security pool. The interest margin will be 2% above 3
month LIBOR and an arrangement fee of 0.5% has been paid on the
outstanding balance of the Loans. The loan to value ratio default
covenant applying to the Loans is 70%, the cash sweep covenant is
65% and the income cover ratio covenant is 120%.
Capital repayments of the Loans will be made at the rate of 1%
per quarter for the next 24 months, falling to 0.25% per quarter
thereafter until the balance of the Loans falls below GBP36m. Under
the terms of the extension of the facilities, the proceeds of sales
of properties within the security pool (net of sales costs) are to
be applied to reducing the balance of the Loans. No other material
changes have been made to the pre-existing loan agreements.
As at the date of this announcement the loan to value ratio in
respect of assets charged under the Loans is 61.0%. This will be
further reduced to 60.2% following the contribution of the
additional assets. The Company's net debt to value ratio on all its
property assets (including those not charged under the Loans) is
52.4%. The Company has no debt finance liabilities other than the
Loans and will continue to hold a cash reserve (expected to be
approximately GBP4.1 million at 30 November 2016) to cover its
working capital requirements.
The extension of the Company's borrowing facilities until 31(st)
December 2019 has placed the Company in a stronger and more secure
position, enabling the Board to continue with confidence the
execution of the investment strategy approved by shareholders. The
amendment of the Loans will also allow the Company to extend the
timeline initially envisaged for the implementation of its current
investment strategy, which had been approved in July 2013. This
will permit the Board to continue with the sale of the Company's
property portfolio in an orderly manner and in a way which
maximises shareholder value.
For more information please contact:
The Local Shopping REIT plc
Tel: 020 7355 8800
Bill Heaney, Director and Company Secretary
This information is provided by RNS
The company news service from the London Stock Exchange
END
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