Hyprop launches surprise R358m equity raise

Hyprop Investments, the owner of landmark shopping centres like Joburg’s Rosebank Mall and Canal Walk in Cape Town, launched and closed an equity raise on the JSE on Tuesday in a surprise move that brought in R358 million.

It announced the equity raise on Tuesday at 8.30am, noting the book build would be issued under Hyprop’s general authority to issue shares for cash, as approved by shareholders at its annual general meeting (AGM) on 24 November, last year.

In a JSE Sens update issued just before 1.30pm the retail-focused property fund revealed that it had raised circa R358 million in the bookbuild. However, it did not say what the equity raise would be earmarked for.

Hyprop’s JSE sponsor Java Capital acted as the sole bookrunner for the equity raise. “Shareholders are advised that the bookbuild is now closed, having raised [circa] R358 million at R28 per share by the issuance of 12 794 725 shares pursuant to the general authority to issue shares for cash,” Hyprop noted.

“The book was oversubscribed at this level,” the fund added. “Subject to approval by the JSE, listing and trading of the new Hyprop shares is expected to commence at 9am on Thursday [20 May].”

Hyprop’s share price is flat year-to-date, up less than 1%. But the fund is trading at a sizeable discount to its net asset value.

Despite being relatively small, the bookbuild came somewhat unexpectedly, considering the group not publicly touting an equity raise being on the cards.

However, the AGM decision (allowing for a possible equity raise) seems to have given Hyprop another card up its sleeve to bring down its debt level and loan-to-value ratio in the face of lingering uncertainty around the impact of Covid-19.

Market watchers believe the bookbuild could be a well-timed move by Hyprop’s management to take advantage of the stronger rand to pay down some of its debt.

The book was oversubscribed at this level