DTZ shares dive in wake of plans for equity sale

December 20, 2008


(London) SHARES in real estate agent DTZ tumbled more than 19 per
cent yesterday after it revealed plans to raise up to £55 million
(S$122.2 million) via share sales designed to galvanise its ailing
business from a savage property slump.

DTZ, which operates in 162 cities worldwide, announced proposals for
a firm placing of almost 100 million new shares to the group's
largest shareholder, Saint George Participations, and a further
placing and open offer of 104 million new shares, both priced at 27
pence each.

The company said that the equity- raising programme was intended to
ensure that the business was appropriately capitalised to better
withstand further market deterioration.

Shares were trading at 23.75 pence by 1100 GMT against a 0.9 per cent
dip in the FTSE 350 Real Estate Index.

'In the light of the unprecedented and uncertain market conditions in
which we all are operating, it continues to be difficult to predict
how markets will develop,' said DTZ chairman Tim Melville-Ross,
adding that the board would not recommend an interim
dividend. 'Markets and industries worldwide are clearly experiencing
the worst trading conditions that any of us can remember.'

In the six months to end-October, DTZ said that its net debt more
than doubled to £74.6 million from £33.7 million at April 30. It
posted a group pretax, pre- exceptionals loss of £9 million versus a
£12.5 million profit in the corresponding period in 2007.

DTZ said that a famine in real estate finance, which had impacted its
North American and UK business arms most dramatically in previous
months, was now taking a toll on all its international operations. As
a result, group revenues on a like-for-like basis fell 17.5 per cent
to £184.3 million.

As part of a cost-cutting drive that has already seen global
headcount fall by 5 per cent, a review of a number of its under-
performing operations was underway, DTZ said. It said that ongoing
restructuring initiatives would save a further £15 million in
2009/2010, doubling anticipated savings of £15 million in 2008.