CROMWELL Property Group (ASX: CMW) has raised $193 million through the institutional component of its capital raising venture.
The retail offer is expected to raise a further $57 million and opens on May 31.
The cash will partly fund the $405 million purchase of seven Sydney office assets from the New South Wales Government and to pay down debt.
Cromwell CEO, Paul Weightman (pictured) says the success of the capital raising is a vote of confidence in the company.
“We are delighted by the robust and continuing support demonstrated by Cromwell's existing institutional security holders and welcome a number of new institutional investors to Cromwell's register. We consider their support a strong endorsement of Cromwell's disciplined and highly successful investment strategy,” says Wiseman in a statement to the ASX.
The portfolio comprises three Sydney CBD assets ($316m) and four regional NSW assets ($89m). It boasts a 9.0 per cent yield with an overall weighted average lease expiry of 10 years. Settlement is expected in June. CMW’s investment portfolio increases to $2.3 billion with the acquisition.
“The acquisition of the NSW Portfolio is consistent with our strategy of providing secure, steadily growing distributions to investors through the management of a portfolio of high quality assets with a long weighted average lease expiry,” says Weightman.
The new shares will be issued at $1 and rank equally with existing CWM stapled securities and will have full entitlement to the June 2013 quarterly distribution. Settlement of the institutional offer is expected on Friday, June 7 and the new securities will hit the market on June 11.
The equity raising was underwritten by Merrill Lynch Equities (Australia) Limited and RBS Morgans Corporate Limited.
The Retail Entitlement Offer is expected to raise a further $57 million and is fully underwritten. It will be open from Friday, May 31 to 5.00pm (AEST) Monday, June 17.
Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support