13/03/2020 - 14:53

Primewest defers spin-out IPO

13/03/2020 - 14:53

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Primewest has postponed the spin-out of a new $285 million commercial property trust, citing market volatility, with Macquarie Bank and rent.com.au among other listed companies to change their capital raising plans.

Primewest defers spin-out IPO
David Schwartz says Primewest is monitoring market conditions and remains well capitalised. Photo: Gabriel Oliveira

Primewest has postponed the spin-out of a new $285 million commercial property trust, citing market volatility, with Macquarie Bank and rent.com.au among other listed companies to change their capital raising plans.

Primewest said the deferral of the planned IPO was in the best interests of its investors, given the uncertainty around the current market conditions.

“We will reconsider the IPO when conditions improve,” chairman John Bond said.

The company announced in late January it would spin-out five of its office assets into ASX-listed Primewest Commercial REIT.

The properties transferred into the trust comprised two buildings at St Georges Terrace and Adelaide Terrace, and two buildings in Brisbane, including Super Retail Group’s headquarters.

Primewest said the deferral would have no impact on its IPO forecasts.

Managing director David Schwartz said the group remained well capitalised with $80 million in cash and no debt.

“We are monitoring the market and will look to deploy this cash opportunistically to take advantage of the current market dislocation,” he said.

Shares in the company closed down 3.2 per cent to $1.05.

Macquarie Bank said it had decided to withdraw a $500 million capital notes offer.

The bank said the decision would not affect its commitment to repay $429 million Macquarie Bank capital notes on March 24 and $400 million Macquarie income securities on April 15.

Macquarie said its capital position remained strong, with a surplus of $5.8 billion at December 31.

The bank's shares closed up 4.2 per cent to $116.48.

Meanwhile, ASX-listed business rent.com.au said it would raise $750,000 to develop its ‘tenancy period’ product but has withdrawn its $2.9 million rights issue announced in early February.

Chief executive Greg Bader said the company decided a smaller placement would be sufficient to launch its RentPay product.

“The recent volatility in the share market has prompted us to reconsider where to best place our energy, with a choice between seeking new investors in challenging times or simply choosing with the support of existing shareholders and getting on with business,” he said.

Instead, the company will issue approximately 16.6 million shares at 4.5 cents per share, with Pinnacle Corporate Finance acting as lead manager to the placement.

rent.com.au remains in a trading halt, pending further announcement.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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