26 Jun 2013

VHP shares rebound after capital raising less than expected

7:09 pm on 26 June 2013

Units in Vital Healthcare Property Trust rebounded on Wednesday after the amount of new capital the trust plans to raise turned out to be less than the market was speculating about on Tuesday.

The units rose 12.5 cents, or more than 10%, to $1.36 after falling nearly 12% on Tuesday.

The trust will raise $39.2 million, considerably less than the between $50 - $75 million the market was speculating about on Tuesday.

Shareholders will be offered one new share for every 10 shares they own and NorthWest International Trust, a 20% shareholder, plans to take up its rights in full.

The issue won't be underwritten, but shareholders can opt to participate in an over-subscription facility to buy any shortfall. NorthWest plans to participate in that facility but won't take its stake beyond just shy of 25%.

Chief executive of the trust's manager, David Carr, said Tuesday's sharp drop in the unit price didn't influence the decision.

He said the new capital will be used to repay debt and fund the trust's ongoing capital spending programme, but it could go towards buying new property if the opportunity arises.