This article is from the Australian Property Journal archive
AFTER consistently trading at a discount to net tangible assets since floating on the ASX in 2016, Elanor Retail Fund (ERF) is looking to delist and become an open-ended, unlisted, multi-sector real estate fund.
The board is intending to begin the process by selling Tweed Mall for $87 million into a new Elanor Investor Group unlisted single asset fund, and an off-market security buy-back to acquire up to all of the securities at a price of $0.79 per security.
ERF will then be delisted and become the Elanor Property Income Fund (EPIF), with an expected NTA of $0.88 per security.
ERF shareholders will receive a special distribution of $0.36 per security funded by the Tweed Mall sale proceeds.
The total value for securityholders who remain invested in EPIF is expected to be $1.24 per security, including the special distribution, a 16.7% premium to the current trading price.
Total value for securityholders that participate in the buy-back will be $1.15 per security, including the special distribution, 7.9% premium.
ERF announced a forecast distribution range for the six months to the end of June of 3.52 to 3.62c per security.
Independent valuations of the fund’s portfolio have increased by $2 million to $193.2 million
ERF said it had consistently traded at a discount to its NTA since listing in November 2016, and had executed a number of strategic initiatives to address that including the sale of Auburn Central at a 4.9% premium to book value, followed by a special distribution of 12 cps, the sale of Moranbah Fair at book value, and an on-market buy-back program in 2020 and 2021.
“The board of ERF has conducted a rigorous review of the proposal and based on the options reviewed, believes that it is the most attractive path to maximising value for ERF securityholders,” EFR chair Paul Bedbrook said.
“The board continues to believe in the fundamentals underpinning the ERF reliable income retail portfolio and that the proposal is in the best interests of ERF securityholders.”
