Goodman Group Shares Plunge 7% Following AU$4 Billion Capital Raising

February 20, 2025 12:32 PM AEDT | By Team Kalkine Media

Goodman Group Shares Plunge 7% Following AU$4 Billion Capital Raising — Image source: shutterstock

Major Capital Raising Sparks Investor Concerns

Goodman successfully raised AU$4 billion through a fully underwritten institutional placement, issuing approximately 119.4 million new shares at AU$33.50 each. This price represents a 6.9% discount compared to where the company’s shares were trading before the halt.

In addition to the institutional placement, Goodman plans to raise an extra AU$400 million from retail investors through a share purchase plan (SPP). This will allow eligible shareholders to buy additional shares at the same discounted price.

While capital raisings are often necessary for expansion, investors reacted negatively to the dilution effect, causing a sharp sell-off in Goodman's stock.

Why is Goodman Raising Funds?

The company is positioning itself for long-term growth, particularly in the high-demand logistics and data centre sectors.

Goodman highlighted that demand for data centres remains strong across its key urban markets, prompting it to expand its development pipeline in collaboration with its investment partners.

The proceeds from the capital raising will provide Goodman with financial flexibility to execute several strategic initiatives, including:

Developing new powered shell and fully fitted data centre projects, expected to be operational by June 2026. These projects will generate approximately 0.5 GW of power and have an estimated end value exceeding AU$10 billion.
Funding Goodman’s share of development costs, expected to total AU$2.7 billion over the next few years.
Exploring additional expansion opportunities in logistics and data centre infrastructure.
Maintaining a conservative gearing ratio and liquidity position, ensuring financial stability while pursuing growth.

Short-Term Impact & Market Reaction

In the near term, some of the funds will be allocated toward debt repayment and liquidity strengthening, providing Goodman with a solid financial foundation for future acquisitions and developments.

Despite these growth ambitions, investors appear to be cautious about the immediate dilution effect and the potential impact on earnings per share (EPS). This reaction has led to Thursday’s sharp decline in the stock price.

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