St Modwen proposes placing to part-fund London development

Regeneration specialist St Modwen has proposed a placing to help fund its share in the development of the New Covent Garden Market (NCGM) in the Nine Elms area near Vauxhall, London.

St Modwen and joint venture partner VINCI Investments will share the costs of the development, which includes a 550,000 square-foot new wholesale market development as well as residential and commercial accommodation.

The construction of the market is expected to cost a total of £150-200m.

The site, which has a total development value of around £2.0bn, forms a major part of the wider regeneration of Vauxhall, Nine Elms and Battersea, located close the the Vauxhall Tube Station.

"The placing proceeds will enable St. Modwen to exploit the potential of the NCGM site without the need to increase debt leverage on the group's balance sheet, and allowing it to use existing resources to fund other developments and major projects," the company said.

St Modwen intends to raise additional equity capital through a placing of up to 20m new ordinary shares of 10p each, representing around 9.99% of the company's existing issued share capital.

Members of the St Modwen board also intend to subscribe for around £200,000 of new ordinary shares of 10p each in the capital of the company in connection with the placing.