Capital & Regional discloses new share issuance, and plunges almost 20%
The scrip dividend shares will rank pari passu in all respects with the company's existing issued ordinary shares, meaning there will be no special preference for the new shares
Property company Capital & Regional, which owns a number of shopping centres in the UK, plunged 19.3% to R7.21 in morning trade on Monday after announcing a new share issuance of 3.1-million shares.
A total of 3,149,015 ordinary shares of £0.01 each in the company are to be issued pursuant to the election offered to shareholders to receive the interim dividend for the six months to end-June by way of the issue of new ordinary shares, the company said.
This represents approximately 0.4% of the current issued share capital of the company.
The scrip dividend shares will rank pari passu in all respects with the company's existing issued ordinary shares, meaning there will be no special preference for the newly issued shares.
Capital & Regional is down 27.4% so far in 2018, in line with other locally listed property stocks that have exposure to the UK property market.
Uncertainty about Brexit, and the growth of e-commerce, has hammered the market. Intu, a takeover target, is down 18.3% so far in 2018. Capital & Counties has lost 14.5% and Hammerson 9.38%.
The local property index is down 27.9% in 2018.
Correction: October 16 2018
An earlier version of this article incorrectly stated that Capital & Regional had provided no reason for the issuing of new shares. The group had indeed clarified its decision, emphasising that the issuance relates to a scrip dividend for existing shareholders. The issuance was not for fundraising, which is a different process.