Announcement
OFFER: APL: Asset Plus announces $60 million equity raising
10:20am
APL
10/09/2020 10:20
OFFER
PRICE SENSITIVE
REL: 1020 HRS Asset Plus Limited
OFFER: APL: Asset Plus announces $60 million equity raising
NZX RELEASE
10 September 2020
Asset Plus announces $60 million equity raising in connection with funding
the Munroe Lane Development
Asset Plus Limited (NZX: APL) has today announced an equity raising of
approximately $60.2 million via a $12.1 million underwritten placement
("Placement") and a $48.1 million underwritten 1 for 1.01 accelerated
non-renounceable entitlement offer ("Entitlement Offer") (together the
"Equity Raise"). This follows the announcement on 20 December 2019 when
Asset Plus entered into a conditional Agreement to Develop and Lease ("ADL")
with Auckland Council to construct an office building in Munroe Lane, Albany,
63% pre-leased to Auckland Council on a 15 year lease (the "Munroe Lane
Development").
Asset Plus announced a $100 million equity raising in March 2020 which
included funding for the Munroe Lane Development but, given global volatility
and uncertainty at that time, this offer was withdrawn and the shareholder
meeting to approve the offer and the Munroe Lane Development that had been
scheduled for 31 March 2020 was cancelled. Since that time Auckland Council
has reconfirmed its desire for Asset Plus to progress the Munroe Lane
Development, and as previously announced has agreed to extend the funding and
shareholder approval condition associated with the development to 30 October
2020. Asset Plus obtained resource consent in relation to the Munroe Lane
Development in May 2020.
The $60.2 million Equity Raise announced today, along with a restructuring of
Asset Plus' existing banking facility, is intended to allow the funding and
shareholder approval condition under the ADL to be satisfied (subject to
shareholder approval also being obtained). The proceeds from the Equity Raise
will be applied to repay all existing outstanding debt with remaining cash
and restructured bank facilities being drawn upon as required throughout the
duration of the development period for Munroe Lane. If the Munroe Lane
Development is completed in accordance with Asset Plus' current indicative
development timetable and cost plan, the value of Asset Plus' investment
properties is expected to increase by approximately $134.5 million.
The Chair of Asset Plus, Bruce Cotterill said "Asset Plus has clear
objectives of increasing the scale of its portfolio and setting a strong
platform for sustainable growth. The Equity Raise, along with the
restructuring of our bank facility, is expected to provide the necessary
funding to complete the Munroe Lane Development and deliver on those
objectives."
Asset Plus will hold a shareholder meeting to approve the Munroe Lane
Development at 2.00pm on Tuesday, 29 September 2020 online at
www.virtualmeeting.co.nz/APL20 and, subject to Government restrictions, at
Link Market Services Limited, Level 11 Deloitte Centre, 80 Queen Street,
Auckland (the "Special Meeting"). Details for the Special Meeting can be
found in the accompanying Notice of Meeting released on the NZX today.
Asset Plus' major shareholder, Augusta Capital, continues to be supportive of
the Munroe Lane Development and has committed to take up 100% of its
entitlement and its pro-rata portion of the placement and will seek to
increase its shareholding from 18.85% up to 19.99% through taking up part of
any shortfall in the Entitlement Offer. Augusta Capital intends to vote all
shares held by it in favour of the Munroe Lane Development at the Special
Meeting. Augusta Capital is now a wholly owned subsidiary of Centuria Capital
Group.
The Munroe Lane Development
On 20 December 2019, Asset Plus announced the entry into the ADL with
Auckland Council to construct the Munroe Lane Development. Auckland Council
will be the anchor tenant for the new office building, agreeing to lease
nearly two thirds of the total office net lettable area of 15,900m2 on a
15-year lease from completion in December 2022.
Munroe Lane is in the heart of the Albany basin. It is located in close
proximity to the Albany Lifestyle Centre and Westfield shopping mall, key
transport links including the park-and-ride which is expected to see
increased utilisation once the dedicated bus lane into Albany is completed.
Leisure amenities including the North Harbour stadium, are also nearby.
Key details for the Munroe Lane Development include:
o The bare land at 6-8 Munroe Lane was acquired on the 2nd of December 2019
for $7.25 million (current book value of $7.5 million as at 31 August 2020)
o Remaining costs to completion for the Munroe Lane Development are estimated
at approximately $120 million as at 31 August 2020
o Construction is expected to commence in November 2020, with an anticipated
completion date of 14 November 2022 and a targeted completion date of 16
December 2022 under the Agreement to Develop and Lease with Auckland Council
o Early Contractor Involvement (ECI) Agreement awarded to Icon after
competitive procurement process - to be converted to construction contract
(based on NZS 3910 form) subject to shareholder approval
o Approximately 39% of estimated construction cost to completion fixed as at
August 2020, with ~80% anticipated to be fixed at the time of award of the
construction contract. Balance (~20%) to be competitively tendered by Icon
with Asset Plus oversight as design packages become available to take
advantage of competitive sub-contractor market conditions
o The Manager of Asset Plus, Augusta Funds Management Limited, and its
specialist development team will oversee the development
o Auckland Council have signed an initial 15-year lease, commencing on
completion of the development, with two 6-year rights of renewal over 63% of
the net lettable area
Further details regarding the Munroe Lane Development can be found in the
accompanying Investor Presentation released on the NZX today.
Equity Raise
The $60.2 million Equity Raise comprises a $12.1 million underwritten
Placement and a $48.1 million underwritten pro-rata accelerated Entitlement
Offer. Both the Placement and Entitlement Offer will be undertaken at a fixed
price of $0.30 per new share ("New Shares") which represents a discount of
17.8% to the last close price of $0.365 per share on Wednesday, 9 September
2020, and an 8.8% discount to the theoretical ex-rights price (TERP) of
$0.33.
The Equity Raise is supported by Asset Plus' largest shareholders, including
Augusta Capital, with pro rata pre-commitments amounting to $25.4 million
received in total which has been excluded from the underwrite. The balance of
the Equity Raise is fully underwritten by Jarden Partners Limited.
Placement
The underwritten Placement will be conducted through a bookbuild in which
institutional and other select investors in New Zealand, Australia, Hong
Kong, and Singapore will be invited to participate. A trading halt has been
granted by NZX prior to the market opening today.
The Placement will raise gross proceeds of approximately $12.1 million and is
underwritten at a fixed price of $0.30 per share. The Placement will comprise
the issue of approximately 40.5 million New Shares which represents 11.2% of
Asset Plus' shares on issue following completion of the Equity Raise.
Settlement of the Placement is scheduled to take place on Wednesday, 16
September 2020 with commencement of trading of New Shares on the NZX taking
place shortly after on the same day. New Shares issued under the Placement
will not be granted entitlements under the Entitlement Offer.
Entitlement Offer
The underwritten 1 for 1.01 Entitlement Offer will raise a total of
approximately $48.1 million at the same application price as the Placement of
$0.30 per New Share. The Entitlement Offer comprises the issue of
approximately 160.3 million New Shares which represents 44.2% of Asset Plus'
shares on issue following completion of the Equity Raise.
The Entitlement Offer will be conducted in two parts, a component to
institutional investors ("Institutional Offer") and a component to retail
shareholders ("Retail Offer"). The Entitlement Offer is non-renounceable, and
entitlements will not be tradeable or otherwise transferrable.
Eligible shareholders under the Institutional Offer include sophisticated,
professional and other institutional shareholders located in New Zealand,
Australia, Hong Kong, and Singapore as at 5.00pm (NZST) on the Record Date of
Monday, 14 September 2020 ("Record Date"). The Institutional Offer will be
accelerated and will close at 5.00pm on Thursday, 10 September 2020.
The Retail Offer will be offered to eligible retail shareholders with a
registered address in New Zealand or New Caledonia as at 5.00pm (NZST) on the
Record Date. The Retail Offer will open on Tuesday, 15 September 2020, and
close on Tuesday, 29 September 2020 (unless extended). Eligible retail
shareholders who take up their entitlement in full will not have their
percentage shareholding in Asset Plus reduced as a result of the Entitlement
Offer. However, even eligible retail shareholders who take up their
entitlement under the Entitlement Offer in full (but do not acquire any New
Shares under the Placement or any additional New Shares under the
oversubscription facility) will be diluted as a consequence of the Placement.
The Offer Document, containing full details of the Entitlement Offer, will be
sent to Eligible Shareholders on Tuesday, 15 September 2020. Eligible
shareholders should go to www.assetplusoffer.co.nz from Tuesday, 15 September
2020 to 5.00pm on Tuesday, 29 September 2020 if they wish to apply.
Key Dates
The key dates* for the Equity Raise are:
Equity Raise timetable
Placement and Institutional Offer undertaken: 10 September 2020
Record date for determining entitlements: 5.00pm on 14 September 2020
Application forms sent to eligible shareholders and Retail Offer opens: 15
September 2020
Settlement and allotment of New Shares issued under the Placement and
Institutional Offer: 16 September 2020
Retail Offer closes: 5.00pm on 29 September 2020
Settlement and allotment of New Shares issued under the Retail Offer: 2
October 2020
Special Meeting of Shareholders timetable
Notice of Meeting released on the NZX: 10 September 2020
Voting record date for Special Meeting of Shareholders: 5.00pm on 25
September 2020
Special Meeting of Shareholders: 2.00pm on 29 September 2020
Results from the Special Meeting of Shareholders: 29 September 2020
*These dates are subject to change and are indicative only.
Additional Information
A conference call will be held at 10.45am, New Zealand time on 10 September
2020 regarding Asset Plus' $60 million Equity Raise in connection with
funding the Munroe Lane Development.
Participants can register for the conference by navigating to:
https://s1.c-conf.com/diamondpass/10009904-invite.html. The Conference ID is
10009904.
Please note that registered participants will receive their dial in number
upon registration.
Additional information regarding the Equity Raise is contained in the
Investor Presentation accompanying this announcement. The Investor
Presentation contains important information including key risks and foreign
selling restrictions with respect to the Equity Raise.
Nothing contained in this announcement constitutes investment, legal, tax or
other advice. Investors are encouraged to seek appropriate professional
advice before making any investment decision.
For any questions in respect of the Retail Offer, please visit
www.assetplusoffer.co.nz or call Link Market Services Limited on +64 9 375
5998 between 8:30am and 5.00pm (NZST) Monday to Friday during the Retail
Offer period. For other questions, investors should contact a professional
adviser.
- ENDS -
For more information contact:
Bruce Cotterill
Chairman, Asset Plus Limited
021 668 881
OVERVIEW https://www.assetplusnz.co.nz/
Asset Plus invests in real estate assets throughout New Zealand, with a focus
on the attractive Auckland market, where the risk adjusted returns support
the overall outperformance objectives of the fund. Asset Plus shareholders
voted on 19 March 2018 to externalise the management of Asset Plus, to
Augusta. Under Augusta's management, Asset Plus focuses on a 'Yield Plus
Growth' investment strategy, targeting long term total returns that are
greater than the benchmark return threshold detailed by the S&P/NZX All Real
Estate Index through value add and active management initiatives. Augusta
externally manage Asset Plus, report to the Asset Plus Board and provide
shared service functions.
This announcement is not a product disclosure statement or offering document
under New Zealand law or under any other law. It is for information purposes
only and does not constitute an offer, invitation or recommendation to
subscribe for, retain or purchase any securities in Asset Plus in any
jurisdiction. This announcement does not constitute financial product advice
or investment advice and does not and will not form part of any contract for
the acquisition of Asset Plus securities.
This announcement has been prepared for release in New Zealand. This
announcement may not be released to US wire services or distributed in the
United States. This announcement does not constitute an offer to sell, or a
solicitation of an offer to buy, securities in the United States (or to, or
for the account or benefit of, any person in the United States) or in any
other jurisdiction in which such an offer would be unlawful.
The information in this announcement is of general background and does not
purport to be complete. It should be read in conjunction with Asset Plus'
other market announcements lodged with NZX, which are available at
www.nzx.com/companies/APL.
End CA:00359529 For:APL Type:OFFER Time:2020-09-10 10:20:25
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