Property investor Primary Health Properties PLC (AIM: PHP) announced it plans a fully underwritten share issue and open offer to raise £57.5 million after expenses, using the money to repay debt and fund acquisitions of medical properties to expand its property portfolio.
It has identified a development pipeline of 21 properties with a total unaudited value of approximately £90.2 million which the company believes it could exploit. PHP’s REIT status should also enable it to unlock latent value in properties held by potential corporate acquisition targets.
It will place 19.033 million shares and make 7.053 million shares available to qualifying shareholders, all priced at 230 pence a share. Shareholders are entitled to receive 1 open offer share for every 5 existing ordinary shares.
The new shares will represent approximately 42.5 percent of the enlarged issued share capital.
Managing director Harry Hyman said: “This capital raising will give PHP the headroom on its existing facilities to enable it to rapidly enlarge its asset base through a series of targeted acquisitions as well as accelerating its debt reduction plan. PHP is an opportunistic acquirer of healthcare property assets and current market conditions are ideal to make investments at historic valuations that will deliver shareholder returns over many years to come. In essence, the fundraising ensures that the company is better capitalised to take advantage of the current market conditions.”
Trading has continued in line with company expectations since the interim results report in mid-August 2009.