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Vital Healthcare seeks to raise $160m

NZN 20/06/2016 Paul McBeth

Vital Healthcare Property Trust plans to raise $160 million to pay down debt, giving it headroom to pursue a pipeline of developments on both sides of the Tasman.

The trust plans to sell shares at $2.08 apiece in a two-for-one pro rata renounceable rights offer, manager Vital Healthcare Management said.

Vital Healthcare's biggest investor and owner of the manager, NorthWest Healthcare Properties Real Estate Investment Trust, intends to take up its full entitlement worth $39.3m, and brokerage Forsyth Barr will underwrite the balance of $120.6m.

The units fell 2.3 per cent to $2.17, still a premium to the offer price, having gained 19 per cent so far this year.

The funds raised will repay bank debt for the hospital and healthcare property developer, which was sitting at $283.7m as at March 31.

Vital Healthcare has been buying properties on both sides of the Tasman and expanding those facilities to latch on to ageing demographics in Australia and New Zealand.

The property investor has $A87.6m ($NZ91.91m) of development projects either underway or in the pipeline, and recent acquisitions add properties worth about $A64.1m in Australia and $31.7m in New Zealand.

"We've done a whole lot of that brownfields and acquisition activity, so we'll put a bit more money in the pot," David Carr, chief executive of the manager, told BusinessDesk.

Mr Carr said Australia still offers the greatest opportunity given its relative size and Vital Healthcare has been expanding its team across the Tasman over the past year.

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