Growthpoint eyeing new acquisitions

Property group Growthpoint (GRT) plans to raise R2bn via the issue of 147,1m new linked units at R13,60 each to seek acquisitions locally and globally, it said on Thursday. "The capital to be raised will enhance Growthpoint's ability to take advantage of local and international property acquisition opportunities that are arising in the volatile markets currently being experienced, and strengthen Growthpoint's balance sheet, thus improving its ability to use cash to conclude transactions," the company said.

"Globally stocks are trading at huge discounts, and funding from banks has practically dried up. Right now Growthpoint has the distinct advantage to use its firm unit price to raise capital," said CEO of Growthpoint Properties Limited, Norbert Sasse.

In the interim, the rights offer will partly fund Growthpoint's future developments and projects, contribute positively to distributions as a result of the favourable rates available for cash deposits and the reduction of short-term borrowings, as well as provide flexibility in relation to future financing obligations.

The 147,058,781 new Growthpoint linked units will be offered at a price of R13,60, which represents a 2,3% discount to Growthpoint's 30-day volume-weighted average price and a 10,6% discount to yesterday's (Wednesday, December 3 2008) closing price of R15,21.

Sasse said that the discount was substantial enough to be attractive to Growthpoint's investors.

Investec Bank Limited has underwritten half of the linked units offered.

"We have canvassed some of our major unit holders, who have welcomed the opportunity to increase their investment in Growthpoint and have responded positively to undertaking this exercise. We are confident that a minimum of R1,4bn will be raised through the rights offer," noted Sasse.

All the prerequisite JSE and Companies Act conditions for this transaction are in the process of being fulfilled.

The Rights Offer will open at 09:00 on Monday, January 5 2009. The last date to trade in the letters of allocation on the JSE is anticipated as Friday January 23, in order to settle by Friday, January 30 2009 when the offer closes at noon.

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