Sharechat Logo

Oceania Healthcare to list on NZX, ASX after $200mn IPO

Friday 31st March 2017

Text too small?

Retirement village operator Oceania Healthcare is planning to raise $200 million in a much-anticipated initial public offering in order to cut its debt and potentially buy new development sites, and will list on the NZX and ASX.

In a statement, the company said it will issue up to 263.2 million new shares, with an indicative price range of 76 cents to $1.04 apiece, valuing the company at between $472 million and $571 million. 

"Proceeds from this offer will assist Oceania Healthcare by providing additional financial flexibility to accelerate its substantial development programme through the reduction of debt, and also providing flexibility to acquire further suitable development sites as opportunities arise," the company said.

There has been talk of an Oceania IPO since 2014, when it was on track for an offer in early 2015, though that didn't eventuate and chief executive Earl Gasparich said the company would wait until at least 2017 to recapitalise. The Australian Financial Review's Street Talk column reported earlier this month that the company was pitching itself to Australian fund managers ahead of a planned ASX listing and IPO.

Oceania is indirectly owned by Macquarie Group through Macquarie Infrastructure & Real Assets, which is not selling any shares into the offer. The bookbuild will take place on April 11 and 12, and the company expects to start trading on the NZX and ASX on May 5, it said. 

The company, which was formed through the merger of ElderCare and QualCare in 2008, runs 48 facilities in New Zealand, with 3,950 care beds, suites and units. It has 1,674 new residences in the pipeline with about 1,000 consented or under construction, mainly at its Lady Allum rest home site on Auckland's North Shore, as well as in Tauranga, Hamilton, Nelson and Christchurch.

Oceania's portfolio is currently weighted 73 percent towards care beds, with the balance being retirement village units. Once its brownfields development landbank is built out over the next eight years, two thirds of the portfolio will comprise care beds and the remaining third retirement village units, it said.

The company said underlying earnings before interest, tax, depreciation and amortisation had been $47 million in 2016, up 59 percent from a year earlier, although it's projecting that to drop 6 percent to $44.3 million in 2017 due to lower retirement village resale volumes and around 100 care beds being taken off the market ahead of redevelopments of some sites.

"In FY18, underlying ebitda is expected to increase by 40 percent year-on-year, in part due to current developments at Meadowbank Village and Lady Allum in Milford being completed and sold down," it said.



  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:

Trustpower signals $11 mln profit boost from metering sale
Chorus defeats secrecy breach claim
Hedging losses drag Kiwi Property first-half net profit down 23.8%
Sky predicts revenue and earnings fall for FY20
Steel & Tube warns of further hit to first-half profit
A2 Milk's AGM should sort the bulls from the bears
Has NZ reached the lower limits of monetary policy?
NZ dollar maintains gains on China-US talks, local rate outlook
MARKET CLOSE: NZ shares edge lower; power companies under pressure
NZ dollar rises as bets on another OCR cut fade

IRG See IRG research reports