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Metlifecare halts dividend, prepares to raise capital

Tuesday 23rd December 2008

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Metlifecare Ltd, the rest-home operator whose shares tumbled 60% this year, suspended its dividends and plans to raise as much as NZ$40 million selling shares as the weakening economy weighs on the property market.

The rest-home operator will use the funds to reduce bank debt as it renegotiates its debt facilities, it said in a statement. Retirement Villages New Zealand, which owns 82% of Metlifecare, will support the capital raising, the company said.

"The company continues to have positive operating cashflows, however ongoing weakness in the property market has led the directors to believe it prudent to actively manage Metlifecare's balance sheet," it said in a statement.

The stock last traded at NZ$3 on Dec. 18 and has lagged behind the NZX 50 Index this year. The company posted a net loss of NZ$53 million in the 12 months through June 30, reflecting a drop in the value of its property portfolio and accounting changes to comply with IFRS for the first time.

The capital raising will begin prior to March 31, the company said today.

"These balance sheet strengthening initiatives will leave the company better positioned for a recovery in the residential housing market," it said.

By Jonathan Underhill

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