Sharechat Logo

Property For Industry to buy $69.5m portfolio, funded through discounted rights issue

Wednesday 4th October 2017

Text too small?

Property For Industry has bought nine properties for $69.5 million to extend the average lease term of its existing portfolio and acquire development opportunities in the future, and will pay for the deal through a discounted rights issue. 

The Auckland-based company adds eight industrial properties and one head office to its existing $1.1 billion portfolio of 83 properties, which will increase the weighted average lease-term to 5.4 years from the current 4.8 years, it said in a statement. The deal won't add to earnings, with PFI affirming guidance for distribution profit of 7.7-to-7.9 cents per share, however two-yearly rent reviews offer the chance of increased revenue in the future and low site coverage provides "significant medium to long-term development potential". 

PFI will fund the deal through a fully underwritten pro-rata renounceable rights issue to raise $70 million. Eligible shareholders will be entitled buy one share for every 10 held at the close of trading on Oct. 12 at a price of $1.54 apiece, a 7.1 percent discount to a theoretical ex-rights price based on yesterday's closing price of $1.67. 

"PFI has a long track record of delivering strong and stable returns to our shareholders and this acquisition represents a continuation of this strategy," chair Peter Masfen said. "The corresponding equity raise allows us to complete this transaction while providing flexibility to invest further across our portfolio."

The deal will initially be funded through an extension of the property investor's banking facilities with the proceeds from the capital raised going to repay that debt. PFI's gearing ratio will fall to 32.3 percent from 34.2 percent once the acquisition and rights issue are completed. 

The acquisition is due to settle on Oct. 31 and the rights offer closes on Nov. 1. 

PFI's board and senior executives will take up all their rights to subscribe to the offer, which is underwritten by Forsyth Barr. 

(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:

Me Today announces equity raising to accelerate growth
Scott Technology Trading Update; Rising to the COVID Challenge
New non-binding indicative offer received from apvg, shareholder meeting deferred
U.S. Added 4.8 Million Jobs in June as Reopened Businesses Rehired
Auditors have a duty to be alert to fraud
Strong sales recovery but uncertainty remains over economic outlook and potential second wave of COVID-19
Auditors keep falling into the same trap
The great interruption continues
Update on Clutha Upper Waitaki Lines Project
Napier Port Welcomes Inland Port Funding

IRG See IRG research reports