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Cromwell On Track for Diversification

Cromwell announced on the Australian Stock Exchange on 7 December 2012 that it was undertaking an equity capital raising of up to AUD163 million to seed a new unlisted property trust, reduce debt and provide additional working capital. Cromwell announced this month that an increase in  operating earnings is driven by the secure revenue stream from its Australian property portfolio.

Cromwell Property Group (CMW, formerly Cromwell Group) is an internally managed Australian property trust and funds manager with an Australian property valued in excess of $1.8 billion and a funds management business that promotes and manages unlisted property investments. Cromwell has two key business units which focus on property investment activities; from equity and capital raising to property management and leasing.

The Cromwell Capital Raising is being undertaken by way of underwritten institutional placements of new Cromwell stapled securities (“New Securities”) at an issue price of AUD0.785 per New Security to raise up to AUD143 million and a non-underwritten security purchase plan (in terms of the rules of the Australian Investments and Securities Commission) to eligible Cromwell security holders to raise up to AUD20 million (GBP13 million)

The Company subscribed for AUD40 million (£26 million) worth of new securities in the capital raising. Furthermore, the placement was subject to a sub-underwriting commitment from Redefine Australian Investments Limited (the Company’s 100% owned subsidiary) for which it received a cash fee of AUD800,000.

The Company’s current shareholding in Cromwell is 321.5 million securities or 22.84% (31 August 2012: 22.08%)

The transaction is in line with Redefine International’s objective of increasing its presence in the Australian property market and is expected to be earnings enhancing for shareholders in the medium to long-term.

Cromwell Property Group (ASX: CMW) today reported at the end of February a 24% increase in operating earnings to AU$45.9 million for the six months to 31 December 2012, driven by the secure revenue stream from its Australian property portfolio.

During the period, Cromwell completed an institutional placement, raising $143 million and an SPP for existing security holders closing in early February 2013, raising approximately $39 million. Both were materially oversubscribed.

Cromwell announced this week that it will continue to seek investment property and funds management opportunities consistent with its strategy of providing superior, risk-adjusted returns to security holders and investors over the long term.

 

“We are seeing increased competition for property assets, indicating property values may soon enter a new period of growth as cap rates reduce to close the yield gap between property and other asset classes.” Chief Executive Officer Paul Weightman .

 

“We have the skills, resources and capital to take advantage of opportunities for growth, however we remain, committed to maintaining the disciplines that have contributed to our consistent outperformance.”

 

 

 

Cromwell and Redefine Raise Funds in Australia

Cromwell Property Group has announced on the Australian Stock Exchange that it was undertaking an equity capital raising of up to A$163 million to seed a new unlisted property trust, reduce debt and provide additional working capital.

Cromwell has two key business units which focus on property investment activities; from equity and capital raising to property management and leasing.

Redefine Properties International Limited, the JSE-listed holding company of UK-based Redefine International, has made it clear that it plans to participate in and sub-underwrite a capital raising of up to A$163m by Cromwell Property Group.

Redefine is internationally diversified through its direct interest in ASX-listed Cromwell Property Group and JSE-listed Redefine Properties International Limited, which has a 71,7% stake in LSE-listed subsidiary Redefine International.  Redefine Properties, in turn, owns 54% of Redefine Properties International.

Cromwell subscribed for A$40 million worth of new securities in the capital raising. The placement was subject to a sub-underwriting commitment from Redefine Australian Investments Limited (the Company’s 100% owned subsidiary) for which it received a cash fee of A$800,000.

Redefine’s current shareholding in Cromwell is 321.5 million securities or 22.84% (31 August 2012: 22.08%).

A$16m had been advanced to the Box Hill Trust to enable it to acquire a proposed development site for a new 20 floor Australian Tax Office building in Melbourne. This in keeping with Redefines objective to increase its presence in the Australian property market.

The capital raising was being undertaken by way of underwritten institutional placements of new Cromwell stapled securities and a non-underwritten security purchase plan to eligible Cromwell security holders.

Cromwell looks to acquire properties producing stable income and capital growth through trying to pick markets with the most potential over rolling 3-5 year periods. The Group also creates and manages unlisted property funds which are mainly invested in by retail investors.