This article is from the Australian Property Journal archive
AUSTRALAND's entitlement offer has received support from institutions raising $364 million. However market investors were not as keen, shares in the group yesterday plummeted 30.25%.
Australand lifted out of a trading halt yesterday after completing the institutional entitlement offer.
The group’s previous close was 97.5 cents prior to the trading halt. Yesterday it fell 29.5 cents to close at a new low of 68 cents – a discount to NTA of $1.66 as at June 30 2008.
The sell off affected 14.32 volumes of shares valued at $10.23 million – but this was enough to wipe over $300 million off the market cap of Australand.
At the end of market day yesterday, Australand’s market cap was $603.03 million – compared to $904.54 million prior to the trading halt.
This is the lowest price Australand has traded on the Australian Stock Exchange in 52-weeks since July 18’s price of 88 cents and is a far cry from its 52-week high $2.65 price on December 11 2007 – when the group was valued at $2.45 billion.
Australand has yesterday announced it has completed the institutional component of its pro-rata entitlement offer which offers eligible securityholders to subscribe to one new stapled security for every one existing stapled security at a price of 60 cents.
Australand said approximately 87% of eligible institutional securityholders participated under the number of stapled securities available (50% based on those eligible excluding CapitaLand).
The institutional offer will raise approximately $364 million, including CapitaLand’s participation of $302 million. CapitaLand has a 53.31% stake in the group.
Australand now plans to raise a further $121.8 million through retail investors. The group will open the retail entitlement offer on August 05.
The capital raising will fall mid range between the initial expectations of $302 million and $557 million.
Proceeds from the raising will be used to reduce gearing and fund projects.
As at June 30 Austaland’s gearing increased from 40.4% to 43.8% and in June 2009 the group will be required to refinance $775 million of debt of which $150 million is in unsecured facilities, $62 million in bridge facilities and $563 million in Commercial Mortgage Backed Securities.
Earlier this week Australand announced a 79% fall in profits for the half year. The group reported a statutory profit after tax of $25.6 million which includes a $7.3 million revaluation loss in its investment property portfolio and $34.7 million write down in residential projects.
Excluding those items, the group’s an operating profit was $67.5 million, an increase of 6% on the prior year.
Australian Property Journal
