Tuesday 22nd July 2014
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Oceania Living, the retirement village operator owned by funds associated with Macquarie Group, is mulling a public listing, raising funds in a sector that's in the midst of a building boom aimed at capitalising on an aging population.
Executives at the company weren't immediately available to comment after a report in the Australian Financial Review said Oceania was considering a $300 million listing on the ASX and NZX. Market sources confirmed a sale was under consideration. Oceania's direct parent is Retirement Care (NZ), which is owned by funds managed by Macquarie Specialised Asset Management.
Retirement Care's 2013 annual report shows the company had bank loans of about $274 million and shareholder loans at no interest of $238 million that mature in 2018, putting total borrowings at $537 million. The shareholders also held $15 million of convertible notes. The retirement village operator's net loss narrowed to $35.5 million in the year ended May 31, 2013, from $41.1 million a year earlier.
The report includes a note that the shareholders won't demand repayment of the loans unless they were confident the company could then continue as a going concern. In the 12 months ended May 31, 2013, Retirement Care had a net cash outflow of $30.2 million.
A listing of that size would be the second-largest this year on the NZX after the government's $733 million partial privatisation of Genesis Energy. and would see Oceania join listed retirement village operators Ryman Healthcare, Metlifecare and Summerset Group Holdings.
Oceania has hired First NZ Capital and Craigs Investment Partners to assist with an initial public offering and may consider a dual-listing on the Australian stock exchange, according to the AFR report.
Oceania operates more than 50 villages and rest homes across New Zealand, employing 3,200 staff for 1,000 people living independently and 3,600 seniors in its resthome and hospital beds, according to its website.
Oceania would be the latest in a pipeline of IPOs which have hit the local stock market. Tomorrow ikeGPS Group, which creates portable measuring devices, debuts on the NZX, while fruit exporter and packager Scales Corp is due to list on Friday, and Metro Performance Glass next week. Vista Entertainment International, a cinema software and data analytics company, is due in August as is ERoad, a logistics and transport tracking software and hardware developer.
Already this year four companies have gone public, including the government's parital privatisation of Genesis Energy, and previously private companies Intueri Education, Gentrack and Serko.
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