Sharechat Logo

Heartland to raise up to $59 mln at 10% discount to fund loan growth

Thursday 9th November 2017

Text too small?

Heartland Bank plans to raise up to $59 million in a discounted rights offer to shareholders to help fund an expanding loan book, which rose at an annual pace of 16 percent in the September quarter. 

The Auckland-based lender will sell shares at $1.70 apiece through a 1-for-15 pro rata rights issue, which it plans to use to help fund credit growth and maintain a healthy balance sheet. That's a discount to the $1.89 price the shares closed at yesterday and a 9.5 percent discount to a theoretical ex-rights price of $1.88. 

The bank reported a 12 percent increase in net profit to $16 million in the three months ended Sept. 30 on a 16 percent gain in net interest income to $44.9 million with net finance receivables totalling $3.68 billion at the balance date. It affirmed annual guidance for net profit of $65 million-to-$68 million 

"Heartland expects underlying asset growth to continue during the remainder of the 2018 financial year," chief executive Jeff Greenslade said in a statement. "To support continued growth in its loan portfolio and maintain a strong balance sheet, Heartland is seeking to raise up to approximately $59 million of new equity under a pro rata rights issue." 

The equity issue comes just three months after Heartland raised $150 million through a five-year bond sale, which it planned to use for general corporate purposes. Heartland operates in different markets to the larger Australian-owned banks, favouring higher margin consumer lending, such as auto-loans and reverse mortgages, and investing in online lending channels, such as peer-to-peer lender Harmoney.

The bank's rights issue opens on Nov. 23 and closes on Dec. 8, with any rights not taken up to be sold through a shortfall bookbuild. The rights won't trade on the NZX and the offer isn't underwritten. 

"Given the size of the offer and the intended use of proceeds - which is to support continued strong asset growth over time - Heartland did not consider that underwriting provided value for shareholders," Greenslade said. 

(BusinessDesk)



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Government package for commercial leases too little, too late
Concerns over Government’s intervention in commercial leases
Development Commitment to Bowen Campus Stage Two
Vista Group International Limited - Update on the impacts of COVID-19
AFT secures Maxigesic IV® distribution in four Western European countries and reports Australasian market share gains in COVID-19 medicines
Investore Property Limited (Investore) today announced its financial results for the twelve months ended 31 March 2020 (FY20).
Rabobank GDT Analysis - Event 261
SkyCity Entertainment Group Limited - Update on COVID-19 Impacts and Recent Trading
ANZ announces sale of UDC Finance
Foley Wines Limited Announces Harvest Result, Earnings Outlook and Development in Martinborough

IRG See IRG research reports