With acquisitions due at Elysium, The Ponds, Doreen, Eyre and St Clair, AVJennings seeks $41 million equity raising after hefty project writedowns
The residential developer AVJennings has unveiled a $41.2 million equity raising to strengthen its balance sheet after hefty property project writedowns early this year.
The new equity will be used to reduce debt facilities, to fund growth objectives and for working capital requirements for its land sites and also the settlement payments for several previous land acquisitions due during the current financial year, including Elysium, The Ponds, Doreen, Eyre and St Clair.
AVJ currently has a significant portfolio of some 10,500 lots under control with many projects now in advanced stages and ready for build-out and development.
AVJ says they will selectively fund investment in built form at the following projects:
• New South Wales: The Ridges Elderslie, Ravensworth Heights Goulburn, The Ponds Kellyville, Charterwood Wadalba, Arcadian Hills Cobbitty
• Victoria: Arena Officer, Lyndarum Epping/Wollert
• Queensland: Glenrowan Mackay, Essington Rise Leichardt, Villaggio Richlands, Creekwood Caloundra
• South Australia: Eyre at Penfield
• New Zealand: Hobsonville Point
AVJ has received credit approved term sheets to renew its existing club facility to 30 September 2015.
The well-known Melbourne-based developer, dual-listed on the ASX and Singapore exchanges, has advised that the chairman, Simon Cheong, will take up his full share of the offer.
The remainder - almost half the register - is to be underwritten by brokers, Bell Potter Securities.
The raising will be through a two for five, non-renounceable rights offer at a price of 37.5¢, which is significantly at a discount to the developer’s net tangible asset per security of 90¢. and a 1.3% discount to AVJ’s closing price on the last day of trading prior to the announcement of the offer.
“This capital raising will provide AVJennings with a stronger balance sheet to build on its diversified project pipeline and position the business for growth in the following years,” managing director Peter Summers said.