Augusta goes unconditional on Airways redevelopment

Augusta Capital Ltd said on Wednesday all conditions for resyndication & redevelopment of Airways Corp of NZ Ltd’s Christchurch premises had been met and the development agreement was unconditional.

Augusta managing director Mark Francis said on 22 December the agreement provided for the development of a new “importance level 4” building which would house part of Airways’ new air traffic management platform. In return, Airways was committing to:

  • an extended 25-year lease term on the new building & 2 of the existing buildings (effective from practical completion, which is expected to occur in mid-2019); and
  • a 9-year lease term on the remaining building (which begins at a date elected by Airways between 12 & 18 months after practical completion).

The combination of those leases provides a weighted average lease term on practical completion of 21.83 years.

The agreement was conditional on receipt of a resource consent, approved funding terms & the approval of the investors in the existing syndicate which owns the property.

This week, Mr Francis said he expected a new single asset fund to be established by 29 March, to raise the required capital for the redevelopment. A product disclosure statement is being prepared, to raise $22.75 million of equity, of which Augusta would underwrite $15 million, with a third party to underwrite the balance.

“The debt & equity funds the purchase of the property from the existing scheme, establishment costs &an expected development spend of $19.23 million.”

Augusta’s guarantee of the development agreement obligations is released on establishment of the new single asset fund, subject to the required equity & debt being raised.

Earlier story:
29 December 2017: Augusta to resyndicate & add to Airways premises

Attribution: Company release.

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