Como-based property developer Port Bouvard Ltd will use its balance sheet to debt fund its recent acquisition of 483 hectares at Gidgegannup for between $81-90 million, producing over 2,000 lots, the company announced today.
The full text of a company announcement is pasted below
Following the previous ASX announcement and confirming the Gidgegannup acquisition, the Directors of listed property developer Port Bouvard Limited (ASX: PBD) have declared their intention to use the Company's strong balance sheet to fund the recent acquisition of land at Gidgegannup.
The successful oversubscribed $112m capital raising and subsequent settlement of Point Grey for $92m allows the Company to use its low gearing ratio and strengthened net asset position to debt fund the rural residential portion of the Gidgegannup land (circa $40m). The objective of continuing to pay dividends bi-annually will also continue as previously advised, subject to market conditions.
The development plan, subject to statutory approvals, aims to bring the first lots (rural residential) to market in financial year 2008/09, which will provide a significant financial boost to the Company.
The remaining balance of land at Gidgegannup, being the town site, is expected to yield approximately 2000 lots and is due for settlement on a deferred basis in FY11 and FY12. The Company is evaluating an off balance sheet transaction to fund this purchase and capitalise on its stated co-investment strategy.
The funds management method of operation to be used by Port Bouvard Limited will involve coinvestment with special purpose syndicates developed using the Company's expertise. They will be structured so that syndicate members will participate directly in the benefit of the development but the Company will provide its expertise and earn fees from doing so. By pursuing this coinvestment model, the Board expects that the Port Bouvard Group's earnings will be regularised and maintainable, hence maximising shareholder value both in earnings per share and market capitalisation.
