Ingenia will raise $175m to capitalise on market dislocation

Ingenia will raise $175m to capitalise on market dislocation

Retirement village and holiday parks company Ingenia Communities Group (ASX: INA) wants to pounce on bargain deals arising from the COVID-19 crisis, so much so that it is willing to dilute almost one fifth of the current ownership.

The group announced today it would be undertaking a $150 million placement at $3.45 per share, representing a 6.5 per cent discount to the last INA trading price.

The Institutional Placement is fully underwritten by Citigroup Global Markets Australia, Goldman Sachs Australia and and Moelis Australia Advisory.

A share purchase plan (SPP) will follow with the goal to raise a further $25 million, taking Ingenia's total cash holdings to $352 million - enough capital to "take advantage of emerging market dislocation".

Ingenia expects the new shares will represent 18.5 per cent of the total securities on issue.

"The Equity Raising provides additional capacity for Ingenia to continue to deliver on its key strategic priorities of scale and sector leadership," says Ingenia CEO Simon Owen.

"Our pipeline remains very strong and our dedicated acquisitions team are beginning to see new opportunities to secure quality assets emerge as a result of the dislocation being caused by COVID-19.

"We expect to prudently deploy the additional capital from the Equity Raising over the next 12-18 months as we benefit from our current pipeline of acquisitions and emerging opportunities."

It has been almost five months since Ingenia successfully completed its last capital raising, announcing on 7 November 2019 it had completed an equity raise for $131.1 million.

Ingenia's management says the company is "well progressed" on around $60 million worth of acquisitions that are due for completion this calendar year.

"In addition to benefitting from further on-strategy acquisitions, the business continues to deliver stable rental cash flows from our portfolio of land lease and seniors' rental communities," says Owen.

"While holiday parks and new home sales have been impacted by Government restrictions, Ingenia remains well placed to benefit once restrictions are eased.

"We continue to operate in a market with solid long-term fundamentals, driven by an ageing population and societal housing affordability issues which will underpin longer-term returns."

The company adds its senior rental (Ingenia Gardens) and Ingenia Lifestyle communities have continued to provide stable cash flows, with Ingenia Gardens reaching an all-time occupancy high of 93.5 per cent. 

Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.

Business News Australia

Get our daily business news

Sign up to our free email news updates.

 
Whitefox Recruitment founder Luke Hemmings making strides as a careers leader
Partner Content
After relocating his Canberra-founded company Whitefox Recruitment to the Gold Coast la...
Whitefox Recruitment
Advertisement

Related Stories

ASIC secures its first court win for greenwashing against US giant Vanguard

ASIC secures its first court win for greenwashing against US giant Vanguard

The Australian corporate watchdog has caught out one of the world&r...

Medicinal cannabis group Althea shaves $1.5m from its cost base through staff cutbacks

Medicinal cannabis group Althea shaves $1.5m from its cost base through staff cutbacks

Australian-founded medicinal cannabis company Althea Group (ASX: AG...

Charter Hall snares 15pc stake in Hotel Property Investments for $97m from 360 Capital

Charter Hall snares 15pc stake in Hotel Property Investments for $97m from 360 Capital

Listed funds manager 360 Capital Group (ASX: TGP) has offloaded its...

Lendlease gains approval for $1.7b transformation of Queen Victoria Market precinct

Lendlease gains approval for $1.7b transformation of Queen Victoria Market precinct

Australian development giant Lendlease Group (ASX: LLC) has been gr...