Dexus Property Group is seeking to raise $450 million in equity through an institutional placement and security purchase plan, to fund investment in new properties.
The group will launch a fully-underwritten $400m placement to institutional investors, with pricing to be determined by a variable price bookbuild from an underwritten floor price of $7.32 per security, it said. That represents a 3 per cent discount to the group’s closing share price of $7.55 on April 21.
Dexus also plans to raise $50m through a non-underwritten security purchase plan for eligible shareholders, and has suspended its on-market securities buyback scheme.
The security purchase plan, expected to open on May 5 and close on June 9, will allow subscriptions up to $15,000 per shareholder.
Proceeds from the equity raisings will be used to pursue investment opportunities including interests in prime grade CBD office properties, at various stages of completion, Dexus said.
One is an office property in exclusive due diligence with a partner on a 50-50 basis.
“This equity raising is intended to give Dexus flexibility to pursue these opportunities while at the same time ensuring gearing remains at the lower end of its target range of 30-40 per cent,” the group said.
Until the money is invested, Dexus plans to use proceeds from the raising to pay down debt.
New securities under each scheme will rank equally with existing securities, including entitlement to the group’s full-year distribution.
Meanwhile, Dexus reaffirmed full-year funds from operations guidance of 59.48 cents per security, including the impact of the capital raising.