24 Dec 2008

Retirement village operator looking to reduce debt

6:08 am on 24 December 2008

Metlifecare intends to issue new shares to raise $30 - $40 million in the new year. The retirement village operator says it wants to reduce debt and strengthen its balance sheet.

Chairman Jim McLay says the company has positive operating cashflows, but strengthening the balance sheet is a prudent move, given the ongoing weakness in the property market.

Its largest shareholder, Retirement Villages New Zealand, will participate in the capital raising.

However, that will be subject to approval by the Overseas Investment Office as it is a foreign-owned company and already holds 82% of Metlifecare.

In another move to support its balance sheet, Metlife is suspending its dividend for the foreseeable future, to retain cash and reduce its gearing.