DTZ seeks to raise £55m in wake of crisis

Global property advisor DTZ is seeking to raise up to £55 mln (EUR59.2 mln) of new equity as it struggles to survive the fallouts of the credit crisis. The London-listed broker, which unveiled a pre-tax loss of £11.2 mln in the first half to October 2008, said the equity raising will support the business and 'enable it to trade through a period of prolonged market weakness.'

DTZ said it is issuing up to 203.8 million new shares at a price of 27 pence each. The company aims to raise a minimum of £37 mln, of which £27 mln will be injected by French Saint George Participations (SGP), which is DTZ's largest shareholder with a stake of 28.7%. As a result, three DTZ board members are stepping down to be replaced by representatives of Saint George Participations.

Additionally, DTZ has agreed new terms with its lender, Royal Bank of Scotland, which are conditional upon the raising of additional capital. It warned that it might not be able to meet debt commitments and could be forced to name administrators if it was unable to successfully complete the placing. DTZ's net debt increased to £74.6 mln, from £33.7 mln in April 2008 as a result of a net outflow of £37.8 mln on operating activities.

The company swung into the black with a loss of £11.2 mln in the first six months of 2008 (including an exceptional charge of £2.2 mln) from a profit of £12.5 mln in the same period in 2007.

DTZ said it hopes to reduce costs by a further £15 mln as part of a range of restructuring and cost cutting measures. It has already reduce its global headcount by around 5%. The company said it plans to further reduce staff numbers and review a number of under-performing operations.

Tim Melville-Ross, DTZ's Chairman, said: 'We expect that our results for the full year will be significantly below previously established market expectations.'