Ryman Healthcare is to raise $902m to pay down debt and fund future developments Photo: RNZ / Nate McKinnon
One of the country's biggest retirement village operators, Ryman Healthcare, is to raise $902 million to pay down debt and fund future developments.
The money will be raised through a share offer of one new share for every 2.8 currently held at $5 each, a near 22 percent discount to its last traded price of $6.40.
Chief executive Richard Umbers said the company needed to reinforce its balance sheet and in particular to reduce its debt levels.
"Our significant recent investment in our portfolio underpins our potential for future growth but has resulted in higher debt than we are comfortable with in current market conditions."
Ryman has 45 retirement villages in New Zealand and Australia catering for about 13,000 residents, with 15 villages under construction, but has been borrowing to acquire sites for future villages and fund its expansion in Australia.
Its debt level has risen to 45.3 percent of the value of its equity, which it planned to reduce to 33.9 percent.
"With a recapitalised balance sheet, a refreshed leadership team and a newly focused approach to development, we believe we are well placed to take advantage of the opportunities in our business," Umbers said.
Ryman shareholders will be offered new shares in proportion to their holdings, and they will be able take up some or all of their entitlement or not at all.
Those not taking up the offer will be able to sell the rights to the new shares on the NZX, and any shares not taken up will be sold through a separate auction to investors, known as a bookbuild.