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Capital & Regional, the co-investing property asset manager, has announced that its 19.4%-controlled X-Leisure Unit Trust is planning to raise around £50 mln (EUR 57 mln) through a heavily discounted offer to existing unit holders. The new units are being offered at a price of 10p, representing a discount of 72.5% to the unit price at end-March of 36.4p.

The open offer is subject to a number of conditions including the agreement of a new financing package with the banking syndicate providing the fund's main facility. A revised facility agreement providing for a relaxation of the LTV covenants and for the Brighton property to be refinanced within the facility has already been agreed by the banks' credit committees. However, further amendments are still being negotiated, including an additional relaxation of the LTV covenant and an extension to the term of the facility. A further LTV waiver until 31 July 2009 from the fund's syndicate banks is being sought to enable the transaction to proceed.

The equity offering also includes a number of proposals for changes in fund strategy and governance. Proposals are being included to carry out a review of fund strategy at the end of 2012 which will consider ways of increasing the liquidity of units and exit options, together with a proposal to bring forward the initial expiry date of the fund to either the end of 2014 or 2015, depending upon the advice of the fund manager at the time. Additionally it is proposed to integrate fund management and property asset management services in order to streamline the provision of services to the fund.

A unit holder vote on the proposals is expected to take place in mid-June and completion is anticipated by the end of July. It is expected that Capital & Regional will subscribe for units in the offer.