Cromwell Property’s Shares Plunged On ASX Despite The Successful Completion Of Its Institutional Entitlement Offer

  • Nov 30, 2018 AEDT
  • Team Kalkine
Cromwell Property’s Shares Plunged On ASX Despite The Successful Completion Of Its Institutional Entitlement Offer

On 30 November 2018, Cromwell Property Group (ASX: CMW) announced the successful completion of the institutional component of its 2 for 13 accelerated Institutional Entitlement Offer. Following the release of this news, the share price of the company decreased by 3.883 percent as on 30 September 2018.

Institutional Entitlement Offer was announced to the market on 28 November 2018, and it has raised approximately $181mn which includes around $86mn worth of entitlements which were taken up by entities associated with ARA Asset Management and Mr. Gordon Tang. 

The Retail Entitlement Offer of the company is expected to raise up to around $119mn which will increase the total size of the entitlement offer to circa $300mn.

The Retail Entitlement Offer is partially underwritten with minimum additional proceeds of $30mn and together with the proceeds from the Institutional Entitlement Offer the total minimum raising is around $211mn.

Stapled securities in Cromwell will be issued at a fixed price of $0.98 per Security, and they will be ranked equally with existing Cromwell Securities on an issue with full entitlement to the 31 December 2018 quarterly distribution.

Around 91 percent of the Institutional Entitlement Offer has been taken up by the eligible institutional securityholders and shortfall under the Institutional Entitlement Offer attracted strong demand with support from both existing and new securityholders. As per the company’s announcement around 185mn securities will be issued under the Institutional Entitlement Offer.

New Securities issued under the Institutional Entitlement Offer are going to be settled on 11 December 2018, and they will be allotted and commence normal trading on 12 December 2018. The Retail Entitlement Offer is going to open on 4 December 2018, and it will close at 5.00pm AEDT on 13 December 2018. Retail securityholders who hold Securities in Cromwell as at 7.00 PM AEDT on the record date of 30 November 2018 and if they have a registered address in Australia or New Zealand then only, they will be considered as eligible security holders for the participation in the Retail Entitlement Offer. The Retail Entitlement Offer will be at the same issue price of $0.98 per Security and offer a ratio of 2 for 13 as the participants in the Institutional Entitlement Offer. Further, the Eligible Retail Securityholders will be having the opportunity to apply and pay for their entitlements before 5.00pm AEDT on 10 December 2018 to have new Securities allotted on the same day as Securities issued under the Institutional Entitlement Offer.

On 30 November 2018, the company has also released a letter for its shareholders on ASX providing the details of the Equity Raising in which the company informed that the proceeds from the Equity Raising would be used to fund Cromwell's circa A$124mn equity commitment in Cromwell European Real Estate Investment Trust's entitlement offer.

The proceeds will also be used to repay debt, providing significant funding capacity to pursue a number of growth opportunities at various stages of progression across Cromwell's balance sheet and funds platform. In the letter, the company informed its shareholders that there could be financial implications for them as a result of the Equity Raising.

CMW shares traded at $0.990 with a market capitalization of circa $2.05 billion as on 30 September 2018 (AEST 4:00 PM).


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