Growthpoint raises R1.65 billion to fund growth

Posted On Friday, 28 September 2007 02:00 Published by eProp Commercial Property News
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Growthpoint Properties Limited, South Africa’s largest listed property company with property assets exceeding R22 billion and a market capitalisation of close to R17 billion, today announced that it has successfully raised R1.65 billion to fund acquisitions and developments in progress

Norbert SasseThe Public Investment Corporation Limited, on behalf of the Government Employees Pension Fund, will subscribe for 100 million new Growthpoint linked units at an issue price of R16.50 per new linked unit.

Growthpoint currently has in excess of R4 billion worth of property acquisitions and developments in the pipeline. “The capital raised through this new issue of Growthpoint linked units will be used to partly fund these acquisitions and developments,” says Growthpoint Properties Limited CEO Norbert Sasse.

“This transaction provides an ideal opportunity for Growthpoint to issue units to the PIC, who have expressed a desire to increase their unitholding in Growthpoint and thereby their overall exposure to the property sector,” notes Sasse.

It is expected that following this transaction the total shareholding of the PIC in Growthpoint will increase to over 10%.

Growthpoint’s total debt of R8,3 billion, at 30 June 2007, represented 37,4% of the value of its property portfolio.  “The additional capital raised will ensure that the loan-to-value ratio will still be at a conservative 40.7% after the R4 billion of acquisitions and developments,” explains Sasse who adds that if this were to be fully debt funded, the loan-to-value ratio would have increased to 47.0%.

Of further benefit to Growthpoint linked unitholders is that the forward yield on the new linked units being issued will be substantially lower than the prevailing all-in cost of long term debt funding rates. 

In terms of the agreement with the PIC existing Growthpoint linked unitholders will be offered the opportunity to participate in the new issue via a clawback offer, details of which will be announced in due course.

Last modified on Wednesday, 23 April 2014 12:15

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