Share issue and loan deal with Wainford Holdings gives retirement homes specialist a boost
Retirement home builder Wren Homes has raised £4m through a share issue and loan deal with investment group Wainford Holdings.
In an announcement to the stock exchange this morning, it said: “The net proceeds of the proposed investment will be used to fund development of the company's extra care accommodation schemes and for general working capital purposes.”
A total of £1m will be raised through the issue of 10 million shares at 10p each to Wainford. The remaining £3m will be in the form of a five-year loan from the company at a 5% rate of interest.
Paul Treadaway, chief executive of Wren Homes, said: “I am delighted to announce this very significant investment into Wren Homes and at a premium to the current share price. It represents a strong endorsement of the company.”
As part of the deal, Dominic Wainford, founder of Wainford Holdings, will be appointed to the Wren board - along with Wren's company secretary, James Butterfield.
City analysts have suggested that smaller housebuilders will struggle to ensure a steady flow of working capital in the current poor trading environment.
In May, Wren announced a pre-tax loss of £393,970 in the half-year to 31 January 2008 after failing to sell a single home in the period.