Lendlease to raise $1.15 billion

Lendlease to raise $1.15 billion

Property project developer Lendlease (ASX: LLC) has today joined the wave of Australian companies raising enormous amounts of capital to ride out the Covid-19 crisis, with plans to dilute its shareholdings by up to a fifth to secure more cash.

This morning the company announced plans for a $950 million fully underwritten institutional placement at $9.80 per share, representing an 8.2 per cent discount to the last trading price.

The placement is set to be issued on 4 May, and will be followed by a share purchase plan (SPP) that closes on 26 May with more than 20.4 million shares on offer.

If the SPP is successful it would add an extra $200 million to the raising, taking the total to $1.15 billion.

Lendlease says the capital raising will position the company well for its $100 billion urbanisation pipeline as well as a pipeline of around 48,500 land lots for its Communities projects.

"This equity raising, coupled with the actions we have already taken, will strengthen the Group's balance sheet position during this uncertain economic environment with available liquidity increased to $3.95 billion, support the delivery of the Group's $112 billion global development pipeline and provide additional flexibility and capacity to pursue further investment opportunities," says Lendlease CEO Steve McCann.

The company has either deferred or reduced non-essential capital expenditure and project expenditure, while senior executives' fixed remuneration has been cut by 20 per cent with some of the savings to go into an employee hardship and wellbeing fund.

That fund will also be topped up by non-executive directors reducing their base fees by up to 20 per cent.

Lendlease is yet to decide whether a final dividend for FY20 will be paid from Lendlease Corporation Limited.

The group says it will continue to explore capital partnerships to deliver its extensive urbanisation portfolio of 21 major projects safely, sustainably and profitably. Recent developments on its projects include:

  • Conditional framework agreement reached to form a 50/50 investment partnership with a capital partner for Milan's Milano Santa Giulia project to develop the $4 billion project over 15 years including the Group selling the first two office buildings to the investment partnership;
  • An additional residential for rent building at London's Elephant Park anticipated to enter delivery in H2 FY20 with capital partner and planning approval having been obtained;
  • One Sydney Harbour presales currently total $1.5 billion representing over 75 per cent of the first tower, and PLLACes together with capital partnership options continue to progress well; and
  • Tower One at TRX Residences, Kuala Lumpur pre-sales currently exceed 50 per cent.

Capital raising activity has been in overdrive since the Covid-19 pandemic began, with motives ranging from sheer survival to precautionary raisings to bolster balance sheets for the year ahead. Here are some of the leading raisings to date:

Updated at 9:40am AEST on 28 April 2020.

 

Subscribe Now!
Four time-saving tips for automating your investment portfolio
Partner Content
In today's fast-paced investment landscape, time is a valuable commodity. Fortunately, w...
Etoro
Advertisement

Related Stories

Centuria fund banks tidy returns as second of three inner-Sydney office buildings sold for $103m

Centuria fund banks tidy returns as second of three inner-Sydney office buildings sold for $103m

Property fund manager Centuria Capital Group (ASX: CNI) has cashed ...

MediSecure data breach: why is health data so lucrative for hackers?

MediSecure data breach: why is health data so lucrative for hackers?

The latest large-scale ransomware attack on a health technology pro...

Victoria passes legislation to phase out stamp duty on commercial and industrial properties

Victoria passes legislation to phase out stamp duty on commercial and industrial properties

Victoria’s transition from a stamp duty to a property tax reg...

The Star confirms US casino group Hard Rock has shown interest in striking a deal

The Star confirms US casino group Hard Rock has shown interest in striking a deal

The Star Entertainment Group (ASX: SGR) has confirmed speculation t...