Sharechat Logo

Arvida to raise $42 mln at 12% discount to help fund new village purchases

Tuesday 20th September 2016

Text too small?

Arvida Group plans to raise $41.8 million selling shares at a 12 percent discount to help fund the acquisition of three new retirement villages in Tauranga and the Waikato. 

The Auckland-based retirement village operator will sell shares at $1.05 apiece in a one-for-seven renounceable rights issue fully underwritten by Forsyth Barr to help fund a $66 million purchase of two villages in Tauranga and one in Cambridge, it said in a statement. That's a discount to the $1.19 price the shares last traded at. 

The villages are expected to add an additional $4.4 million of underlying profit to Arvida's earnings, a 28 percent boost to its 2016 result which was better than the company forecast when listing in December 2014. 

"These acquisitions are on strategy and provide us with a presence in two key New Zealand regions experiencing high growth in aged care and retirement living," chairman Peter Wilson said. "We continue to actively consider opportunities that meet our strict criteria in terms of location, quality of assets and current management, potential for development earnings accretion." 

Arvida was created through the merger of 17 retirement villages and aged care facilities and has added to that with several acquisitions since listing. 

The latest purchases will increase Arvida's portfolio to 25 villages with 1,384 care beds and 1,248 units, and adds $11 million of land available for brownfields development. Arvida increased its banking facility with ANZ Bank New Zealand to $80 million to provide headroom for more acquisitions, and will have net debt of $42 million once the deal is settled. 

The rights will be tradable on the NZX from Sept. 27 until Oct. 12, and the offer closes on Oct. 18, with a shortfall bookbuild scheduled for Oct. 21.

BusinessDesk.co.nz



  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:

House price inflation ticks higher as sales volumes recover
Fletcher in $31 mln dispute with ministry over Greymouth hospital
NZ dollar eases as markets fret about US-China trade talks
15th October 2019 Morning Report
CTU pressures govt for Fair Pay Agreements
NZ Rugby not ready for a seat at Sky board table
MARKET CLOSE: NZ shares gain; Sky soars on NZ Rugby deal
NZ dollar falls ahead of inflation data
F&P Healthcare shares hit record on improved guidance
Bounce in international guest nights some reprieve for slowing tourism sector

IRG See IRG research reports