An investment and funds management business, Elanor Investors Group (ASX: ENN) notified the market on 11th April 2019, that Rockworth Capital Partners Pte Ltd (Rockworth) has secured an 18% strategic stake in ENN, by an acquisition of 14.4 million stapled securities from existing security holders and a placement of 3.5 million new fully paid stapled securities (New Securities).
Rockworth is based in Singapore and is an established real estate funds and asset management company. It has an Australian portfolio of around A$850 million throughout the retail and office real estate segments.
Rockworth acquired its stake at A$1.85 per stapled security, for a total consideration of A$6.5 million. It represented a 6.3% premium to the last closing price of A$1.74 on 10 April 2019 or an 8.2% premium to the 30 days VWAP. The new securities will be issued using Elanor’s existing placement capacity under ASX Listing Rule 7.1. No security holder approval is required for the placement. It is expected that the new securities will be issued and allotted on 12th April 2019. The new securities will be entitled to the distribution from Elanor for the half year ending 30th June 2019.
The company also mentioned that ENN had issued 3,500,000 fully paid ordinary stapled securities at an issue price of $1.85 per stapled security, pursuant to the placement to institutional and professional investors, which have been announced on 11th April 2019 (Placement). The proceeds of the placement will be used to fund Elanor’s investment in funds management initiatives.
ENN has also inked a strategic alliance agreement with Rockworth that delivers a substantial commercial alignment between the groups concentrated on the growth of funds under management that delivers solid yields for Elanor’s capital partners and security holders. The strategic alliance positions ENN to capitalise on future growth opportunities and augments the group’s capital raising capabilities.
The main elements of the strategic alliance include as following:
1) Rockworth is acquiring a strategic interest of 18% in Elanor by way of acquisitions from existing investors and institutional placement.
2) ENN and Rockworth augmenting AUM by identifying, co-investing in, and co-managing, new assets and fund opportunities.
3) Rockworth’s founder and CEO, Lim Kin Song joining the ENN Board of Directors.
Rockworth’s Chief Executive Officer, Mr Lim Kin Song, commented that the transaction reflected Rockworth’s long-term commitment to the Australian commercial real estate market, while it continues to seek further growth in the broader APAC region, especially in developed economies that present opportunities to deliver strong risk-adjusted returns.
ENN’s Chief Executive Officer, Mr. Glenn Willis, stated that ENN would indulge in the exploration of an array of real estate investment management initiatives with Rockworth in the near term. The strategic alliance with Rockworth would further increase the capital raising capability of the group, following a number of international and domestic institutional capital partners that have invested in Elanor managed funds in the period of last 12 months.
On 11th March 2019, ENN updated about its new managed funds initiatives.
At market close on 11th April 2019, the stock of the company was trading at a price of A$1.860, up by 6.897% from its previous day’s closing price. The company has a market capitalisation of A$167 million with circa 95.98 million shares outstanding.
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