NZX-listed Asset Plus Ltd announced a $100 million rights issue yesterday to fund development of the Albany building it will lease to Auckland Council, and part-fund redevelopment of 35 Graham St in the central city, a building the company bought from the council.
A separate outcome from the rights issue is that 18.85% Asset Plus shareholder Augusta Capital Ltd expects to reduce its stake to 11.2%.
The underwritten 1.235:1 pro rata rights offer follows the company’s announcement on 20 December that it had entered into a conditional agreement with Auckland Council to develop & lease an office building in Munroe Lane, Albany.
It will have a gross floor area of 26,500m², net lettable area of 15,100m² & 212 parking spaces.
Asset Plus chair Bruce Cotterill said the company would initially use proceeds from the rights offer to repay existing bank debt, putting the company in a net cash position when the offer is completed.
It would then draw down development funds as required.
Asset Plus will hold a shareholder meeting to approve the Albany development & the rights offer on Tuesday 31 March (1.30pm at Link Market Services Ltd, Deloitte Centre, 80 Queen St).
Asset Plus’s 18.85% shareholder & manager, Augusta Capital Ltd, will vote in favour of the development & rights offer, and has committed to subscribe for $5 million of new shares, which represents about 26.5% of its rights in the offer. It won’t participate in the shortfall bookbuild.
Asset Plus will make the 50c/new share rights offer to shareholders in New Zealand & New Caledonia, and institutional shareholders in Australia, Hong Kong & Singapore. The 50c price represents a 6.7% discount to the theoretical ex-rights price of 53.6c based on the market close of 58c on Monday.
Excluding Augusta Capital’s $5 million commitment, Jarden Ltd will fully underwrite the rest of the offer.
The rights won’t be quoted on the NZX main board. Instead, any rights not taken up, or attributable to ineligible shareholders, will be offered to investors through the shortfall bookbuild. In addition to institutional investors, retail shareholders who take up their rights in full will have the opportunity to apply for additional new shares offered in the shortfall bookbuild.
The rights offer is set to open on 19 March and close on 1 April (the day after the meeting to authorise it). The shortfall bookbuild is set for 3 April, allotment 8 April.
Earlier story, 14 February 2020: Asset Plus signs council for Albany development, prepares for capital-raising
Attribution: Asset Plus, Augusta.