Helical PLC HELICAL TO REDUCE DEBT AND LOWER FINANCE COSTS (5201C)

TIDMHLCL

RNS Number : 5201C

Helical PLC

22 January 2018

22 January 2018

HELICAL PLC

('Helical'/ 'the Company')

HELICAL TO REDUCE DEBT AND LOWER FINANCE COSTS USING PROCEEDS OF RECENT SALES

Helical has today announced its intention to redeem its GBP80.0m 6.00 per cent bonds on 2 March 2018 in line with its plans to reduce debt and its annual finance costs.

The bonds were issued on 24 June 2013 with a maturity date of 24 June 2020. Based on the closing price of the benchmark gilt on 19 January 2018, the aggregate redemption price is expected to be circa GBP89.0m, a premium of GBP9.0m over the aggregate issue price of the bonds. The redemption price of the bonds will be calculated at 11.00 a.m. on 28 February 2018 based on the benchmark gilt at that time plus a 0.5 per cent. margin, in accordance with, and as described in further detail in, the terms and conditions of the bonds. Following the redemption of the bonds, the Company's future interest payments are expected to reduce by GBP11.1m (GBP4.8m pa) in the period to 24 June 2020, a net saving of GBP2.1m.

Helical has also increased an existing loan facility with Aviva Investors, adding its investment assets at The Loom, London E1 and Churchgate and Lee House, Manchester to Shepherd's Building, London W14. The GBP124m facility releases GBP45m of cash to Helical and is a mix of fixed rate and new floating rate debt. The loan is due for repayment in December 2024 and will carry an initial interest rate of 3.28%, with interest on GBP31m varying with movements in 3 month LIBOR.

Since 30 September 2017 Helical has also:

- Repaid its fully drawn GBP102m facility with Deutsche Pfandbriefbank AG, previously due to be repaid in August 2020;

- Transferred its GBP60m facility (GBP45m drawn) with HSBC to the purchaser of its retirement village portfolio, previously due to be repaid in August 2020.

Once completed, the loan and bond repayments, net of the increased facility with Aviva Investors, will reduce annual finance costs by circa GBP8.9m.

Tim Murphy, Finance Director, said: "We have used the proceeds of recent sales to substantially reduce the Company's gross borrowings and annual finance costs. In addition, I am pleased to have secured longer-term debt with Aviva Investors for two of our core investment properties. These actions are part of our approach to maintaining capital discipline whilst providing flexibility to allow us to pursue our business strategy."

For further information please contact:

 
 Helical 
 Tim Murphy             Tel: [phone] 
 
   FTI Consulting 
 Dido Laurimore/Tom     Tel: [phone] 
  Gough/Richard Gotla 
 

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014.

Forward-looking statements

Certain statements in this announcement are forward-looking statements which are based on the Company's expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Given these risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of such statements and, except as required by applicable law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

This information is provided by RNS

The company news service from the London Stock Exchange

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January 22, 2018 04:47 ET (09:47 GMT)