Property Trust Announces Unit Purchase Plan
NZX & MEDIA RELEASE
28 April 2009
Kiwi Income Property Trust Announces Further Details Of Unit Purchase Plan
Kiwi Income Property Trust today announced further details of its proposed Unit Purchase Plan (UPP), to provide eligible unit holders with the opportunity to acquire units on terms substantially equivalent to those offered under a $50 million institutional placement completed on 1 April 2009. It is expected that unit holders with a registered address in Australia or New Zealand will be eligible to participate in the UPP.
The price of the units issued under the UPP will be the lesser of 87.9 cents per unit, being the issue price under the institutional placement, and a volume weighted average price over the seven calendar days prior to the UPP offer opening. The issue price will also be subject to provisions of the Trust Deed which currently limits the issue price discount to no greater than 10% of the volume weighted average price over the seven calendar days prior to the UPP offer opening.
The new units issued under the UPP will be entitled to the distribution for the six months to 31 March 2009.
The UPP offer is expected to open on 18 May 2009, following the announcement of Kiwi Income Property Trust’s annual result for the financial year ending 31 March 2009. Details relating to the UPP will be mailed to unit holders at this time.
The Manager of the Trust has applied to the New Zealand Securities Commission and NZX for exemptions and waivers to allow it to offer eligible unit holders the opportunity to acquire units with a value up to NZ$15,000 (instead of the current limit of NZ$5,000) and to the Australian Securities and Investment Commission to permit the offer to be made to Australian unit holders. The amount to be raised under the UPP offer will be limited to $15 million and will not be underwritten. Applications will be scaled pro-rata if they total greater than this maximum amount.
The proceeds of the UPP will be used to further reduce debt and strengthen the financial position of the Trust. Prior to the recently completed institutional placement, bank debt represented approximately 33% of total assets. The effect of the placement and recent asset sales announced will be to reduce gearing by approximately 4%.
Chris Gudgeon, Chief Executive of the Manager of the Trust, said “The institutional placement and UPP, together with recently announced asset sales totalling $38 million, are capital management initiatives that are expected to provide capacity to absorb further potential reductions in asset valuations should they occur. Our increased financial capacity will also better position the Trust to take advantage of future opportunities that may arise.”