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NorthWest may lift Vital Healthcare stake up to 24.99 percent in $39.2M rights issue

Wednesday 26th June 2013

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NorthWest International Healthcare Properties Real Estate Investment Trust, the cornerstone shareholder in Vital Healthcare Property Trust, may lift its stake to as much as 24.99 percent from 20 percent by participating in its $39.2 million rights offer.

Vital plans to raise the funds through a one-for-10 pro rata renounceable rights issue at $1.275 a share, the manager of the medical and healthcare property investor said in a statement. The new units will be entitled to the final quarter distribution for the current financial year. Vital's shares rose 6.1 percent to $1.31 on the NZX today.

The equity capital will be used initially to reduce bank debt and will provide more flexibility to fund the company's capital spending plans, said Graeme Horsley, chairman of Vital's manager, Vital Healthcare Management.

"It was of paramount importance to the board that this offer be in a form that allows existing unitholders of Vital the opportunity to participate on an equitable basis and in priority to other prospective investors," he said.

In April NorthWest International, which owns Vital's manager, said it planned to lift its stake in the trust to just under a quarter, buying units on market at prices between $1.15 and $1.38. It plans to take up its full entitlement to new units to a maximum of 24.99 percent, according to today's statement. NorthWest is a Canadian entity whose principal is Paul Dalla Lana.

Vital plans to release a prospectus early next month and open the offer in late July.

Separately, Vital said the value of its property portfolio has risen by $9.9 million to $624.8 million, based on an unaudited valuation as at June 30.

Vital's loan to value ratio was 44.8 percent at Dec. 31, from 42.3 percent at the end of the last financial year. Total debt rose to $279 million from $245.8 million.

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