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Summary

  • ASX-listed Centuria Capital Group (ASX:CNI) acquires Visy glass facility in Auckland for NZ$178 million on a 20-year sale and leaseback.
  • The acquisition is anticipated to form the largest NZ single asset unlisted fund to be launched by Augusta Capital and underwritten by Centuria.
  • CNI would also take a fully underwritten $100.0 million equity raising, comprising of an entitlement offer and an institutional placement to raise $80.5 million and $19.5 million, respectively.
  • Centuria also upgraded its FY2021 EPS and DPS guidance by 9.0 and 5.0 per cent, respectively.

ASX-listed Centuria Capital Group (ASX:CNI) has acquired Visy glass facility in Auckland at NZ$178 million through its wholly-owned subsidiary.

The acquisition by Centuria will be on a 20-year sale and leaseback, forming a new NZ single asset unlisted fund to be launched by Augusta Capital. This will be underwritten by Centuria, representing the largest single asset unlisted fund launched by the Group to date. As a result of the Visy Facility acquisition, the assets under management (or AUM) of the Company has increased to ~ $10.0 billion.

$100.0 million equity raising

Apart from the acquisition, the Company notified shareholders about a fully underwritten $100.0 million equity raising, comprising of a 1 for 15 accelerated non-renounceable pro-rata entitlement offer and an institutional placement to raise $80.5 million and $19.5 million, respectively.

The entitlement offer would comprise of two parts: an institutional and retail entitlement offer.

CNI would issue the new security at an issue price of $2.25 a share, representing a 1.7 per cent discount to the last closing price of $2.29 (as on 21 October 2020) and a 2.8 per cent discount to the 5-day volume-weighted average price (or VWAP) of $2.32 a share (as on 21 October 2020).

Furthermore, CNI suggested that the equity raising would reposition its balance sheet through the repayment of debt while providing flexibility to execute new transaction opportunities, including the acquisition of the Visy Facility.

CNI will have nearly $105 million of working capital after the equity raising with a pro forma operating gearing of ~ 2.5 per cent.

Future Guidance

The Company also updated its FY2021 guidance over a strong first-half performance from property funds management operations across Australia and New Zealand, and now, CNI anticipates the FY2021 operating EPS to fall in the range 11.5 to 12.5 cents a share, representing a 9 per cent increase in the previous guidance.

  • Apart from that, the Company also anticipates a 5.9 per cent increase in DPS guidance, which would now stand at 9.0 cents a share.

Adding to the announcement, CNI suggested that the recent acquisition enhances its fund management platform across Australia via unlocking a new and significant acquisition pipeline in New Zealand.

The market currently seems to be agreeing with the management comments, keeping the stock under an intermediate uptrend from the level of $1.355 (intraday low on 6 April 2020) to the recent high of $2.480 (intraday high on 20 October 2020).

The recent upside rally in the stock marks a price appreciation of ~ 83.02 per cent. As on 22 October 2020, the stock is on a trading halt on ASX over the request by the Company. The stock would resume trading from 23 October 2020.

 

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