Property For Industry to buy $69.5m portfolio, funded through discounted rights issue
By Paul McBeth
Oct. 4 (BusinessDesk) - Property For Industry has bought nine properties for $69.5 million to extend the average lease
term of its existing portfolio and acquire development opportunities in the future, and will pay for the deal through a
discounted rights issue,
The Auckland-based company adds eight industrial properties and one head office to its existing $1.1 billion portfolio
of 83 properties, which will increase the weighted average lease-term to 5.4 years from the current 4.8 years, it said
in a statement. The deal won't add to earnings, with PFI affirming guidance for distribution profit of 7.7-to-7.9 cents
per share, however two-yearly rent reviews offer the chance of increased revenue in the future and low site coverage
provides "significant medium to long-term development potential".
PFI will fund the deal through a fully underwritten pro-rata renounceable rights issue to raise $70 million. Eligible
shareholders will be entitled buy one share for every 10 held at the close of trading on Oct. 12 at a price of $1.54
apiece, a 7.1 percent discount to a theoretical ex-rights price based on yesterday's closing price of $1.67.
"PFI has a long track record of delivering strong and stable returns to our shareholders and this acquisition represents
a continuation of this strategy," chair Peter Masfen said. "The corresponding equity raise allows us to complete this
transaction while providing flexibility to invest further across our portfolio."
The deal will initially be funded through an extension of the property investor's banking facilities with the proceeds
from the capital raised going to repay that debt. PFI's gearing ratio will fall to 32.3 percent from 34.2 percent once
the acquisition and rights issue are completed.
The acquisition is due to settle on Oct. 31 and the rights offer closes on Nov. 1.
PFI's board and senior executives will take up all their rights to subscribe to the offer, which is underwritten by
Forsyth Barr.
(BusinessDesk)
ends