Hammerson seeks cash as losses hit £1.6bn

Property developer Hammerson today went cap in hand to the City for £584.2 million after plunging property prices saw it crash into the red.

The firm, which owns £6.4 billion of assets including London's Brent Cross shopping centre and the Bullring in Birmingham, plans to raise the cash by selling new shares to reduce debt and "substantially strengthen" its creaking finances.

It came as Hammerson reported losses of £1.6 billion for 2008 against profits of £110.4 million in the previous year.

The seven-for-five rights issue was priced at 150p a share - a massive 62 per cent discount on the 397p closing price on Friday. Hammerson shares rose 28p to 425p today, having tumbled from 1747p in March 2007.

Chief executive John Richards said the firm was forced into the rights issue because attempts to raise new funds by selling properties were being thwarted by the lack of credit available to would-be buyers.

With property prices down 20.9 per cent in 2008 and nearly a third since the peak in mid-2007, Hammerson was at risk of breaching its banking agreements.

After the fundraising, underwritten by Citigroup and Deutsche, the firm could absorb a further 25 per cent fall in value, Richards said.

Rival British Land could seek funds when it delivers results on Thursday.