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Vital Healthcare announces “transformative” Australian acquisition

Tuesday 2nd November 2010

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 Vital Healthcare Management, manager of the Vital Healthcare Property Trust, has announced it has conditionally agreed to acquire 12 hospital and medical properties in Australia from Essential Healthcare Trust (EHCT).

“This is a transformative acquisition for the Trust in terms of its scale, diversification and the benefits that come from an increased NZX50 Index weighting,” said Vital Healthcare Management general manager David Carr.

“It is difficult to source opportunities of this nature that not only improve portfolio and financial metrics but align with the strategic direction of the Trust.”

The proposed transaction will be partly financed by a $150.9 million capital raising and is subject to the approval of the unitholders of both ECHT and the Trust.

The transaction relates to the acquisition of 12 Australian healthcare properties and a loan to Healthe Care Australia for a total consideration of A$164.5 million plus certain approved value-adding capital expenditure on the acquisition properties.

The acquisition properties include surgical and psychiatric private hospitals and medical centres in Queensland, New South Wales, Victoria and Tasmania.

Vital Healthcare Management chairman Bill Thurston said, “Over the past few years we have considered a number of opportunities for the Trust however in keeping with our portfolio management strategy we have been prudent and conservative in our approach. We are delighted that this transaction aligns with our long-term strategy, enhances portfolio metrics and is forecast to improve unitholder returns.”

To fund the transaction the Trust intends to raise $150.9 million of new equity through a 1-for-1 pro-rata renounceable rights issue. The issue price for new units will be $1.05 per unit and the offer is fully underwritten by Forsyth Barr Group.

“It was of paramount importance to the board that this capital raising be structured to allow existing unitholders of the Trust the opportunity to participate on an equitable basis and in priority to other prospective investors,” said Thurston.

"A pro-rata renounceable rights issue gives unitholders that right.”

Thurston said the transaction will involve the largest equity capital raising on the NZX year to date and will further cement the Trust’s reputation as a specialist property investment vehicle.

Further details on the offer will be provided when a simplified disclosure prospectus is registered, which is expected on November 3.

Both the acquisition and the offer are subject to the approval of the Trust’s unitholders, which will be sought at the annual general meeting on November 24.

A series of unitholder briefings are scheduled for Auckland, Tauranga, Wellington, Christchurch and Invercargill from November 12 to provide unitholders with more information on the proposals.



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