Medical property investor Vital Healthcare Property Trust plans to raise $200 million to fund a pair of South Island acquisitions and developments of existing properties.
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The company would raise the capital through an underwritten rights offer. It would give existing unit holders the option to buy one unit for every 8.54 units they hold at an offer price of $2.95.
The offer represents a 5.4 percent discount on the last traded price of $3.12 and was 4.9 percent less than the theoretical ex-rights price of $3.10.
Vital plans to purchase its first South Island properties, which include a health precinct in Queenstown's Kawarau and an outpatient facility in Christchurch for a combined $145m.
"The acquisitions announced today will enhance Vital's geographic diversification and mark our strategic entry into New Zealand's South Island," Vital fund manager Aaron Hockly said.
"In addition, we are delighted to announce two additional developments that have arisen from our long-standing relationships with New Zealand's three largest private hospital operators."
The company said it had proposed to purchase Endoscopy Auckland for $22.2m with plans to spend $21.6m on building a new surgery and endoscopy facility.
It was also planning to expand Ormiston Hospital, which it already owns, spending $40m to develop a new building which would connect to existing facilities via an airbridge.
"These developments will enable us to provide additional health infrastructure for Auckland whilst also providing adjusted funds from operations and valuation growth for Vital's unitholders."
The net proceeds from the equity raise would be used to repay debt incurred for recently announced acquisitions and developments, including those announced today.
Vital Healthcare is managed by NorthWest Healthcare Properties Management, which is a subsidiary of the Toronto-listed global healthcare fund manager, NorthWest Healthcare Properties REIT.
NorthWest had agreed to subscribe for $55m in units to represent its 27.5 percent stake in Vital.
The balance of the offer is underwritten by Craig's Investment Partners and Forsyth Barr.
The offer would be opened to existing institutional investors initially, followed by an institutional book build and then the opening of the retail offer and the subsequent retail bookbuild.