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Metlifecare raises $70 mln at 8.3 % discount in institutional placement

Friday 31st May 2013

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Metlifecare, the retirement village operator and developer, raised $70 million at an 8.3 percent discount in a placement to institutional investors after yesterday's bookbuild process was completed.

Some $22.6 million shares were sold at $3.10 apiece after the bookbuild, which set the price, having been halted at $3.38 before the sale. Metlifecare plans to raise a further $10 million in a share purchase plan to existing investors, and will use the funds raised to repay debt.

"The capital raising has generated strong support from our existing shareholders," managing director Alan Edwards said in a statement. "The capital raising was also successful in attracting a number of new offshore institutional investors and expanding our shareholder base through eligible investors of the retail brokers."

Metlifecare had $134 million of debt at April 30, of which $33 million was classified as development debt and $101 million as non-development. Following the placement, non-development debt reduces to $14 million, a further $17 million is listed at land-backed debt and development debt remains unchanged.

The company is aiming for a build rate of at least 200 new beds and units a year by 2015, it said.

The company had $198 million of debt post its 2012 merger with Vision Senior Living and Private Life Care Holdings. It subsequently reduced debt via the sale of two South Island assets, Oakwoods in Nelson and its Ilam development site in Christchurch.

Goldman Sachs acted as sole lead manager, placement agent, underwriter and bookrunner for the offer.

Goldman and Arrow International sold Vision Senior Living into Metlifecare in last year's merger for 13 million shares, with the opportunity of a further 7 million shares if the average share price meets a $3 target within 28 months of the deal.

The stock is rated a 'buy' with a price target of $3.70, according to a Reuters survey of three analysts.

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