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The NCGM project has a gross development value of £2bn. It centres on the £200m redevelopment of the wholesale market itself, in return for which St Modwen and its partner Vinci Investments get to develop 20 acres of surplus land for housing.
The proceeds of the placing will be used to fund, in part, St Modwen's 50% share of the development of the site and allow it to exploit the potential of the north side of the site, a 10-acre strip that is set to be developed first.
St Modwen plans to place 20 million ordinary shares of 10p each, representing approximately 10% of the company’s share capital.
The developer has also set out its envisaged timetable for the NCGM project:
- submission of an improved planning application in winter 2013
- planning consent/unconditional date anticipated in Winter 2014
- market construction to start in early 2015
- vacant possession of the northern site by spring 2016
- completion of market construction and vacant possession of remaining acres of surplus land by winter 2020. Development of the Entrance and Apex sites then begins.
St Modwen believes that the placing will enable it to exploit the potential of the northern site without needing to increase its debt leverage, therefore enabling it to use existing financial resources for its other developments.
Chief executive Bill Oliver said: "The redevelopment of New Covent Garden Market represents a landmark project in Central London for St Modwen, providing us with an opportunity to participate in one of London's most exciting long-term regeneration schemes and to utilise our extensive experience in regenerating complex, brownfield sites.
“The proceeds from the placing will allow S. Modwen to exploit the potential of the development and create value for shareholders without the need to increase the debt leverage on the Group's balance sheet, whilst seeking to ensure the company has the financial flexibility to deliver its other pipeline projects."
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