Abacus Property Group (ASX:ABP) Set To Raise $402 Million 

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Abacus Property Group (ASX:ABP) Set To Raise $402 Million 

 Abacus Property Group (ASX:ABP) Set To Raise $402 Million 

Summary

  • Abacus Property Group is undertaking a fully underwritten entitlement offer to secure nearly AUD 402 million.
  • Under the entitlement offer, approximately 138.7 million new Abacus securities will be issued.
  • The Company delivered a robust trading performance across its portfolio during Q1 FY21.

Abacus Property Group (ASX:ABP) is launching an equity raising worth $402 million to shore up its balance sheet and acquisition funding. The equity raising will enable the Company to boost its acquisition capacity for continued growth and repay debt. The increase in acquisition capacity is likely to allow the Company to undertake developments, acquisitions, and other future growth initiatives.

The Company has announced a fully underwritten 1-for-4.8 accelerated non-renounceable pro-rata entitlement offer to raise nearly AUD 402 million. The Company has invited eligible securityholders to subscribe for one new Abacus stapled security for every 4.8 existing Abacus stapled securities held as at AEDT 7:00 PM on Thursday, 10 December 2020.

Entitlement Offer Details

Around 138.7 million new Abacus securities will be issued under the entitlement offer at a fixed price of AUD 2.90 per new security.

The price represents - 

  • 6.5% discount to the last close price of AUD 3.10 on Monday, 7 December 2020
  • 7.7% discount to the 5-day Volume Weighted Average Price (VWAP) of AUD 3.14 on Monday, 7 December 2020
  • 5.4% discount to the theoretical ex-rights price (TERP) of AUD 3.07

The entitlements will not be tradeable or transferrable. Each new security issued will rank equally with the existing Abacus securities on issue.

The Company invited all eligible institutional securityholders to participate in the institutional entitlement offer on 8 December 2020. The retail component of the entitlement offer will be open to eligible retail security holders from 14 December 2020 to 23 December 2020.

Calculator Australia, ABP's biggest securityholder, is supportive of the entitlement offer and plans to take up its full entitlement. Moreover, Calculator Australia commits to sub-underwrite nearly AUD 49 million across the retail tranche of the entitlement offer.

Q1 FY21 Update

ABP registered robust Q1 FY21 results for the self-storage portfolio, on the back of multi-pronged growth strategy.  The Company reported occupancy of 89.7% and revenue per available square metre of AUD 251. Additionally, rent collection remained high at 99%. 

For the office portfolio, the Company highlighted a resilient Q1 FY21 trading performance, backed by acquisitions and active asset management. It completed more than 28,000 sqm of leasing space with positive spreads. Office portfolio occupancy stood at 91.4% and rent collection was 91%.

Source: ABP Equity Raising Presentation December 2020

Full-year distribution for FY21 is expected to reflect a payout ratio in accordance with the target range of 85% - 95% of funds from operations (FFO).

ABP last traded flat at AUD 3.1 on 7 December 2020, with a market capitalisation of AUD 2.06 billion.

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