PFI seeks $70m to help buy properties

PROPERTY For Industry (PFI) has gone to shareholders asking for nearly $70 million in an equityraising to help buy eight industrial properties and one office property.

The purchases will be funded by $69.8 million of new equity through a fully underwritten onefor10 pro rata rights issue priced at $1.54.

Eligible shareholders have until November 1 to subscribe to new shares under the offer. The company’s board and senior executives will take up all their respective rights.

Forsyth Barr is the acting lead manager and underwriter for the rights issue and will receive fees in connection with this role.

Broker Lyn Howe said Forsyth Barr’s research coverage of PFI was ‘‘restricted’’ and forecasts had not been updated.

A briefing note said seven of the nine properties had been bought from Transport Investments Ltd in a saleandleaseback transaction and 15 new leases started from the settlement date, expected to be October 31.

A nationwide transport and logistics business, Transport Investments’ portfolio included eight industrial warehouses alongside its head office.

A key feature of the portfolio was the low site coverage — 25% on average — largely reflecting their current use as transport operators required large yards for trucking.

‘‘This provides development potential, albeit this is a longterm opportunity given the current lease structure.’’

The portfolio also included two properties leased to NZ Post, Aviagen and Rockgas, the research note said.

Given the acquisition would be solely equityfunded, gearing for PFI would fall. PFI was expecting its loantovalue ratio to reduce from 34.2% at June to 32.3% pro forma.

A $70 million bank facility with ANZ had been established to fund the purchases but it would be paid down with the offer proceeds.