Growthpoint raises R4.3bn equity capital through oversubscribed placement

Properties has announced its successful closure of its sizeable R4.3 billion
equity raise, which opened during the afternoon of the 11th of
November 2020. The placement was 2.74 times oversubscribed.

listed REIT initially sought to raise R4 billion which it increased in response
to the strong demand for new Growthpoint shares.

are extremely pleased with the success of our accelerated bookbuild, which
enjoyed robust demand particularly from offshore. Local support totalled 57% of
the capital raise with the balance coming from noteworthy international
interest. It is encouraging to receive strong support from so many local and
global investment institutions
” commented Norbert Sasse, Group CEO of
Growthpoint Properties.

With the capital raised in this bookbuild,
Growthpoint will reduce leverage and maintain balance sheet strength to support
operating flexibility and to undertake certain development and investment
activities. This balance sheet strength will position the company well for
growth opportunities that may arise in the future.

Proceeds raised from the bookbuild will in
part be used to repay the debt from Growthpoint’s subscription and partial cash
offer for shares in Capital & Regional in December 2019.

The capital raise is part of Growthpoint’s
larger capital plan which includes cost and capital expenditure savings,
partial retention of earnings through the Dividend Reinvestment Plan (DRIP) and
dividend pay-out ratio of at least 75% of distributable income, which is
compliant with SA REIT legislation. It also includes a non-core asset disposal
programme of R1bn to R1.5bn in the current financial year.

As a result of the R4.3 billion placement,
Growthpoint’s loan to value (LTV) ratio, which was 43.9% on the 30th
of June 2020, will decrease to approximately 41.5% on a pro-forma basis.
Growthpoint continues to enjoy comfortable debt covenant headroom, with its
strictest LTV covenant being 55%. At end-October, Growthpoint had R5.4 billion
of liquidity available in committed undrawn facilities and cash prior to this
capital raise.

The 358,333,333 new Growthpoint shares
were priced at R12.00 per share, which represents a 6.3%
premium to the pre-launch 30 business day volume weighted average share price,
adjusted for any cum dividend portion, of R11.29 per share as at market close
on the 11th of November 2020.

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