UK Small Caps

LONDON (ShareCast) - German property company Deutsche Land (LSE: DLD.L - news) has raised £14.3m though a share placing to reduce its net gearing and provide funds for development projects.

The company placed 119.3m new shares at 12p per share with new and existing shareholders.

The company has conditionally agreed to issue a further 167.5m shares at 12p to Black Sea Global Properties, a wholly owned subsidiary of Rompetrol Holding. As the purchase of these shares would give Rompetrol a 54.1% stake in Deutsche Land the deal is subject to the Takeover Panel waiving the obligation for Rompetrol to make an offer for the entire issued ordinary share capital of the company.

Deutsche Land made a loss before tax of €82.5m in 2008, compared to a pre-tax loss of €15m the year before.

The loss on the revaluation of investment properties accounted for the bulk of the loss, coming in at €58.4m versus a loss of €17.1m in 2007.

The company also took a bath on derivative financial instruments, which declined by €19.1m after rising in value by €4.8m in 2007, while a further €6.6m was written down relating to its stakes in GWB Immobilien AG (Frankfurt: A0JKHG - news) and Rücker Immobilien AG.

The company’s property portfolio, excluding the companies acquired in the Rücker purchase, was valued at €560.1m at the end of 2008, down from €601.6m at the end of 2007.

Gross rental income rose to €40.1m from €24.3m.

The occupancy rate for commercial properties improved to 92% from 87% the year before.

‘The group's property portfolio continues to perform well and costs remain tightly controlled, allowing the group to generate operating profits and cash flow sufficient to service its loans,’ said chief executive officer David Maxwell.