Proposed Repayment of Deb.Stk
Great Portland Estates PLC
10 April 2001
For immediate release
Great Portland Estates PLC
£100 million 9.5 per cent. First Mortgage Debenture Stock 2016
Proposed Repayment
Great Portland Estates PLC (the 'Company') announces that, following
consultation with the Association of British Insurers ('ABI'), it has today
given notice to holders of its 9.5 per cent First Mortgage Debenture Stock
2016 (the 'Stock') of a proposal to facilitate the early repayment of the
Stock in full. The proposal will be put to a meeting of Stockholders on 3rd
May, 2001.
Under the proposal, the terms of the Stock would be amended to enable the
Company to repay the Stock early at a price equal to 1.40 per cent above the
yield on the 8% Treasury Stock 2015. The Company intends to exercise this
right shortly after the meeting.
A special committee of the ABI has examined the proposal and finds it
acceptable. The members of the committee (who represent approximately £33.7
million / 33.7 per cent in nominal amount of the Stock) have agreed to vote in
favour of the proposal in respect of their holdings, and are recommending the
same course of action to other ABI members who hold the Stock.
The proposal, if accepted, will reduce the Company's weighted average cost of
borrowing, from 9.5 per cent four years ago, to 7.5 per cent. It will also
realise a one-off exceptional charge of approximately £32 million (pre-tax,
and based on current gilt yields) in the year ending 31st March, 2002,
representing the premium to be paid for the repayment of the Stock. The full
cost of the repayment would be met from the Company's existing bank
facilities.
Commenting on the proposal, John Whiteley, Finance Director of Great Portland
said:
'In the last two years we have sold 25 per cent of our portfolio, comprising
some £500 million of properties, and repaid £325 million to shareholders
through a return of capital and share buy-backs. The portfolio is now
substantially concentrated on central London and offices in the South East,
and today's announcement is a natural continuation of our strategy to make
Great Portland a focused, well-financed company.'
Contacts:
Great Portland Estates PLC
John Whiteley Finance Director 020 7580 3040
Cazenove & Co.
Francis Burkitt Partner 020 7825 9942
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