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UPDATE 1-Songbird ups interest in C. Wharf Gp. to 69 pct

Published 09/18/2009, 03:02 AM
Updated 09/18/2009, 03:04 AM
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* Buys 54 million shares in hub operating firm for $186 million

* Plans to finance purchase by growing its own share issue

(Adds detail)

LONDON, Sept 18 (Reuters) - Songbird Estates, the owner of much of London's Canary Wharf business hub, has bought 54 million shares in the district's operating company Canary Wharf Group (CWG) for 112.5 million pounds ($186.2 million).

The shares, which were sold by Germany's Commerzbank AG, represent 8.45 percent of CWG's outstanding ordinary share capital and take Songbird's holdings in the company to 69.3 percent from 60.8 percent.

Songbird intends to finance the share purchase by increasing the size of a previously announced share issue it has planned to repay an 880 million pounds loan from Citibank.

"This transaction significantly increases Songbird's ownership interest in Canary Wharf and further demonstrates the commitment to the Company by a core set of investors," Songbird Chairman David Pritchard said.

"It is an important development ahead of the formal launch of the forthcoming equity raising process in which all our shareholders will have the opportunity to participate," he added.

Songbird said it expects the ordinary equity element of its share issue to be 675 million pounds and the preference portion to be 275 million pounds.

The remaining balance will be funded by a debt facility provided which may take the form of a shareholder loan from Qatar Holding LLC, China Investment Corporation, Morgan Stanley Real Estate Funds and GF Investments II.

"We fully support the management of Songbird in undertaking this transaction, which we believe is a good opportunity to create value for all Songbird shareholders," said Ahmad Al-Sayed, Chief Executive Officer of Qatar Holding.

"We are therefore increasing our participation in the planned fund-raising to ensure its successful completion," he said. ($1=.6041 Pound) (Reporting by Sinead Cruise; Editing by Jon Loades-Carter) (See www.reutersrealestate.com for the global service for real estate professionals from Reuters)

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