Real estate investment manager Folkestone is raising $42 million through an institutional placement of shares and a non-renounceable rights issue.
The proceeds will be used to increase its stake in childcare facilities provider Folkestone Education Trust and to fund growth opportunities.
Folkestone will raise $15.8m through the share placement to institutional investors, and another $26.2m through the 1-for-4 rights offer.
Shares for both will be issued at $0.20 per share, an 11 per cent discount to its last traded price on the ASX, with the institutional placement to be completed on Monday.
Earlier this month, Folkestone announced plans to merge two listed funds it manages — Folkestone Education Trust and sister trust Folkestone Social Infrastructure Fund — to create a $545 million vehicle. The merger would increase its stake in FET to 4.8 per cent.
Folkestone will now buy additional units in FET to raise its stake to 9.5 per cent.
It will also use the proceeds to part-fund new development projects.
The funds manager is currently conducting exclusive due diligence on six projects and is in negotiation for another five projects.
BG Capital and Moelis & Co are lead managers for the placement and rights offer.