Finance: Growthpoint R1.74 Billion Rights Issue is Oversubscribed
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JSE ALSI 40 listed Growthpoint Properties Limited, the largest South African listed property company with assets exceeding R28 billion and a market capitalisation over R20 billion, today confirmed that its R1.74 billion capital raising rights issue had been oversubscribed when the offer closed on Friday, 30 January 2009.
The successful rights issue, which opened on Monday, 5 January 2009, made available 128,092,620 Growthpoint linked units at R13.60 each. The excess application demand totalled 6,237,035 Growthpoint linked units, for which subscriptions could not be met.
CEO of Growthpoint Properties Limited, Norbert Sasse attributes the market’s positive response to Growthpoint’s rights issue in no small measure to Growthpoint’s notable achievements made last year. In November Growthpoint become the only South African real estate company to be included in the MSCI (Morgan Stanley) Barra’s MSCI Emerging Markets stock index, and it made its landmark debut on the JSE/Actuaries All Share 40 Top Companies Index (ALSI 40 Index) on 22 December 2008, ranked 31^ of the 40 top companies.
“Growthpoint has capitalized on its distinct advantage to use its firm unit price to raise capital in this economic environment. The positive outcome is a testament to the tremendous interest for investment in Growthpoint which currently exists,” says Sasse. Growthpoint’s linked unit price opened at R14.51 today (Monday, 2 February 2009) and is weathering economic conditions significantly better than the JSE All Share and its listed property peers.
The R1.74 billion capital raised will enhance Growthpoint’s ability to take advantage of local and international property acquisition opportunities that are arising in the volatile markets currently being experienced, and strengthen Growthpoint’s balance sheet, thus improving its ability to use cash to conclude transactions. In the interim it will partly fund Growthpoint’s future developments and projects, contribute positively to distributions as a result of the favourable rates available for cash deposits and the reduction of short term borrowings, as well as provide flexibility in relation to future financing obligations.
“There are excellent opportunities in the property sector which have the potential to be distribution enhancing for Growthpoint’s linked unitholders and we are in a unique position to pursue them,” says Sasse.
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