GREEN Property has announced a rights issue to raise £30 million from shareholders as the company acquires a property portfolio in Britain for £37.1 million sterling.

The rights issue, which surprised the market, is aimed at putting Green into a position to continue to grow by "progressive select investment", according to its chief executive, Mr Stephen Vernon.

This fund raising will give Green the capacity to do further deals when appropriate opportunities arise, he said. Asked if a further acquisition was in the pipeline he replied "we are always looking".

Funding the acquisition entirely through debt would have left the company over borrowed, Mr Vernon said. "We did not want to do a small rights issue and this fund raising will give us scope to do £20 million to £30 million in further deals," he said.

On completion of the acquisition and fund raising, Green's gearing - borrowings as a percentage of shareholders funds - will rise only marginally from its end 1995 level of 75 per cent.

With the company's Blanchardstown shopping centre development due to move on to the balance sheet as an investment at year end, as well as the increase in shareholders funds, Mr Vernon said bee is prepared to allow gearing to rise to about 100 per cent.

That level would be appropriate for a property company with good rent generating property, whereas a level of 75 per cent is more appropriate for a company developments and sites, he said. Interest costs are well covered by earnings, he added. Interest charges were covered about three times by earnings in 1995.

Green shareholders are being offered one new share for every three they own at a price of 200p per share, putting Green shares at an ex rights price of 231.5p. After the announcement, Green shares drifted back towards the ex rights price closing at 235p.

At 200p the rights issue shares have been priced at a 17 per cent discount to Thursday's closing price of 242p.

Some 15,378,659 new Green shares will be issued, raising £30.76 million for Green before expenses. The fund raising will increase the market capitalisation of Green from £110 million to £146 million at the ex rights price.

Mr Vernon said the increase in market capitalisation is important because "size is an issue in the Irish market when companies are trying to get support".

The rights issue is being fully underwritten by Ulster Bank Capital Markets. The finance director Mr Danny Kitchen, said there were positive indications of shareholder interest. Shareholders will be asked to approve the rights issue and the acquisition at an extraordinary general meeting on June 10th.

Green is buying the property portfolio from United Friendly Insurance. The addition of the property portfolio in Britain will improve the geographic balance and the lot size of Green's UK assets Mr Vernon said.

"We believe this is a well timed acquisition of a quality portfolio where the opportunity exists for value enhancement," he said.

The portfolio consists of 13 properties, mainly industrial premises mostly located in the south east of England. About 75 per cent of the portfolio is made up of five industrial/warehouse properties in Bridgwater, Harlow, Milton Keynes, Peterborough and West Drayton.

The portfolio includes four office buildings, two at Esher and Weybridge close to the M25 motorway. City centre retail outlets comprise six per cent of the portfolio. Tenants include Fujitsu, Somerfield, Clement Clarke, Woodchester and the Burton group.

All of the properties are producing rental income and the portfolio has been valued at £38.25 million sterling. It is generating an annual rent roll of £3.4 million sterling, giving a yield of 9.2 per cent. Most of the leases involved have unexpired terms of more than 10 years, according to Green.

Some 75 per cent of Green's assets are in Ireland and this figure is expected to increase when the Blanchardstown shopping centre is valued as an investment property at the end of 1996. The inclusion of the centre, which opens in October, on a valuation basis in the company's accounts will increase net assets.

Before the latest announcement UK broker NatWest Securities had been forecasting a rise in net asset value per share to 263p this year and 298p in 1997 from an end 1995 value of 202p, mainly from the inclusion of the Blanchardstown centre.

Green reported a 58 per cent rise in profits to £6.38 million for 1995.