DEXUS Property Group has gone cap in hand to the market seeking $749 million and at the same time revealed plans to repatriate funds by offloading assets in Europe and United States.
Dexus has announced an equity raising to raise approximately $A749 million which involves an institutional placement to raise approximately $A90 million at $A0.65 per new security and an accelerated non-renounceable 2-for-7 entitlement offer to eligible existing security holders to raise up to $A659 million at $A0.65 per new security/
CEO Victor Hoog Antink said the exercise will strengthen the balance sheet by reducing pro-forma gearing to 30.2% with DEXUS’s interest cover moving to over 3.1x as well as strengthen the liquidity position to manage debt maturities to June 2011 including medium term note maturities.
Post the equity raising, Hoog Antink added the group will be one of Australia’s best capitalised REITs, with a BBB+ (Stable) credit rating and have available liquidity of approximately $1.4 billion.
In addition, the trust has also kicked start an asset sales program to realign its interests and focus on Australian office and industrial properties.
In Europe, Dexus has appointed DTZ to manage the sale of the French property portfolio and will shortly be appointing agents to sell the German property portfolio.
In the United States, the trust has appointed CB Richard Ellis to manage the sale of part of the portfolio. This will reduce Dexus’ overall exposure to the US market.
In Australia, DEXUS will continue to dispose of selected non-core Australian properties.
Hoog Antink said the asset sale program is expected to realise approximately $A600 million in total.
But he warned there is no certainty that asset sales will be achieved.
Meanwhile the trust has revised its underlying operational earnings forecast of 10.8 cents per security as a result of the equity raising and assuming the Equity Raising is fully subscribed, Dexus expects pro-forma full year FFO dilution of approximately 2.4 cents per security.
Hoog Antink said the group expects to deliver earnings of 5.0 cents per security with a resulting second half year distribution of 3.5 cents per security.
Australian Property Journal
