07/11/2014 - 12:53

Peet seeks $47m raising to fund expansion

07/11/2014 - 12:53

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Perth land developer Peet says it will seek to raise $47 million to help fund $95 million worth of acquisition interests in six residential development projects across Australia.

Peet seeks $47m raising to fund expansion
Peet managing director Brendan Gore.

Perth land developer Peet says it will seek to raise $47 million to help fund $95 million worth of acquisition interests in six residential development projects across Australia.

In a statement this morning, Peet said it bought a 50 per cent stake in Golden Bay estate north of Mandurah and fully acquired the Bluestone Mount Barker estate in Adelaide, in a joint partnership with the Future Fund.

Housing Minister Bill Marmion released a statement late this afternoon, announcing the 50 per cent stake sale of Golden Bay, which was launched in 2012 by the Department of Housing, to Peet and the Future Fund for $33.9 million.

Peet also acquired additional landholding next to its Aston Craigieburn estate in Victoria, and has secured two residential sites in Perth, which it claims is located within an existing town centre at one of its existing Perth projects.

In June, Peet entered into a joint equal partnership with ABN Group to buy a parcel of land in Midvale from the Department of Housing for $18 million.

Of the acquisitions, Peet said Golden Bay and Bluestone Mount Barker were active developments and would contribute to FY15 earnings.

Peet will be development manager for all six projects, which together comprise over 3,000 lots and dwellings.

To fund these acquisitions, Peet said it would conduct a $47 million equity raising, comprising two placements, and use $55 million of its own cash.

A $40 million underwritten placement will be made to existing and institutional investors, while the remaining $7 million will be placed to an entity associated with Peet chairman Tony Lennon.

The placements will be made at a 5.5 per cent discounted price of $1.11 per share.

The institutional placement has been underwritten by Merrill Lynch Equities.

The land developer also said it would undertake a non-underwritten $5 million share purchase plan to provide eligible shareholders with the opportunity to participate in the equity raising, at the same price as the placements.

Peet managing director Brendan Gore said the use of joint ventures to acquire the projects would allow the business to receive development management fees and sales fees, as well as development profits and potentially performance fees.

In August, Peet announced it had reinstated its dividend payments after recording a solid lift in net profit on the back of improved performance across its core divisions.

Its net profit came in at $30.3 million for FY14, up from $0.9 million in the previous financial year.

Peet said it would pay a final dividend of 3.5 cents per share, its first payout since 2011.

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