Medical real estate investor Vital Healthcare Property Trust plans to raise $200 million to fund a pair of acquisitions and developments of existing properties on the South Island.
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The company would raise capital through a secured rights offering. This would give existing unit holders the option to buy one unit for 8.54 units they hold at an offer price of $2.95.
The offer represents a discount of 5.4% on the last traded price of $3.12 and was 4.9% below the theoretical price excluding duties of $3.10.
Vital plans to buy its first properties on the South Island, which include a health center at Kawarau in Queenstown and an outpatient facility in Christchurch for a total of $145 million.
“The acquisitions announced today will strengthen Vital’s geographic diversification and mark our strategic entry into the South Island of New Zealand,” said Aaron Hockly, fund manager of Vital.
“In addition, we are delighted to announce two additional developments that stem from our long-standing relationships with New Zealand’s three largest private hospital operators.”
The company said it had offered to buy Endoscopy Auckland for $22.2 million and planned to spend $21.6 million building a new surgery and endoscopy center.
He also planned to expand Ormiston Hospital, which he already owns, by spending $40 million to develop a new building that would connect to existing facilities via a skybridge.
“These developments will allow us to provide additional healthcare infrastructure for Auckland while providing adjusted operating funds and valuation growth for Vital unitholders.”
The net proceeds from the capital increase would be used to repay debt incurred for recently announced acquisitions and developments, including those announced today.
Vital Healthcare is managed by NorthWest Healthcare Properties Management, which is a subsidiary of Toronto-listed global healthcare fund manager NorthWest Healthcare Properties REIT.
NorthWest had agreed to subscribe for $55 million worth of units to represent its 27.5% stake in Vital.
The balance of the offering is guaranteed by Craig’s Investment Partners and Forsyth Barr.
The offering would be open to existing institutional investors first, followed by an institutional bookbuilding, then the opening of the retail offering and subsequent retail bookbuilding.
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