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Kiwi Income Property Trust To Raise $50m

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, April 1 NZPA - Kiwi Income Property Trust is proposing to raise about $50 million through an issue of new units, partly to prepare itself should its asset valuations fall further.

For the year to the end of March, the trust reported a 10.1 percent fall in the value of its office and retail portfolio to $1.91 billion.

The trust said today the issue of new units through a $50m institutional placement was one of a number of capital management initiatives to further strengthen its financial position.

It also intended to provide eligible unit holders with an opportunity to acquire units under a proposed unit purchase plan. Details of the plan are expected to be available by the end of April.

Sean Wareing, chairman of trust manager Kiwi Income Properties Ltd, said the equity raising strengthened the balance sheet and reinforced a commitment to maintain a conservative level of gearing.

Kiwi Income Properties Ltd chief executive Chris Gudgeon said that along with the institutional placement and unit purchase plan, the trust had recently announced asset sales totalling $38m.

Those capital management initiatives were expected to provide capacity to absorb further potential reductions in asset valuations should they occur, he said.

The increased financial capacity would also better position the trust to take advantage of future opportunities that might arise in the current environment.

The projected cash distribution for the year to the end of March continued to be 8c per unit.

Kiwi Income Property Trust was today placed on a trading halt, at the company's request, as it carries out a book build.

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