This article is from the Australian Property Journal archive
Watpac has bought a portfolio of Queensland development properties from the Seymour Group for $54.16 million.
The development properties portfolio includes the Upmarket apartments sites at Airlie Beach; Retail site at Pandanus Drive, Cannonvale; Retail site at Coolum Beach Shopping Centre (Cnr Beach Road); Commercial property at Kingsford Smith Drive, Brisbane; Waterfront residential, Hervey Bay; Acreage subdivision, Hervey Bay; Fishermans Wharf Marina, Hervey Bay and Mixed use property on the Esplanade, Hervey Bay.
The properties when developed are forecast to generate in excess of $300 million in sales value.
Watpac’s managing director Greg Kempton said the off-market acquisition has been the subject of negotiation since last year.
“Rarely has Queensland seen such a great collection of properties sold in one line which encompasses a range of markets including residential, retail, land subdivision, marina, tourist facilities and commercial office space.
“We foresee the development of these properties will add to existing pre-tax profits in the 2009, 2010 and 2011 financial years and correspondingly boost earnings per share in that period,” he added.
Kempton said another major benefit for Watpac is the reduced lead time required to develop the projects due to them being well advanced in the design and development approval phase at the time of acquisition.
Watpac will pay a cash component of $22.8 m and the assume $31.36 million of debt associated with the properties.
The cash payment of $22.8m will be tied contemporaneously to a Subscription Agreement whereby the Seymour companies subscribe for an allocation of 6.0 million shares at $3.80 per share, with these new shares not entitled to dividends until the 2007/08 financial year.
In addition, the Seymour companies will be granted 2.5 million free options convertible at $4.50 after two years from grant date, thereby ensuring that the Seymour Group remains committed with Watpac in sourcing property projects, in turn enabling the company to produce returns on equity equal to or better than its peers in the development industry.
On allotment of the 6.0 million shares, the issued capital of Watpac will increase to approximately 105.924 million shares and the Seymour Group shareholding will increase to approximately 26.0 million shares.
The transaction is subject to shareholder approval and the receipt of an expert’s report confirming the transaction is fair and reasonable to shareholders not associated with Kevin Seymour.
Australian Property Journal
