18 May 2015

Kiwi Property issues shares to raise $150 million

1:33 pm on 18 May 2015

Kiwi Property Group is issuing new shares as part of a $150 million capital raising.

The property investor said it would use the money to repay debt and provide funding for a near $200 million potential expansion of its Sylvia Park property in Auckland.

Chief executive, Chris Gudgeon, said the company was considering a plan to expand Sylvia Park's retail space by 20,000 square metres, at an estimated cost of $150 million, which could be completed by 2018.

He said the group was also considering the development of a office building at Sylvia Park, which would cost an estimated $45 million.

The company hopes to raise $151.9 million, by offering shareholders one new share for every nine held, at $1.20 each.

The price is a seven percent discount to the average share price over the last five trading days. The share price ended Friday at $1.28.5.

Trading in the company's shares have been suspended, while it undertakes an institutional bookbuild, over the next two days.

The retail component of the offer will close on 9 June.

Meanwhile, Kiwi Property's full-year net profit rose almost 14 percent, partly reflecting more than $8 million of cost savings resulting from the company's transition from a trust.

The commercial property investor made a profit of $115.2 million for the year to the end of March.

Revenue fell by 1 percent to $206.7 million.

The company will pay a slightly higher full-year dividend of 6.5 cents per share.