Ingenia to raise $175m in Equity

Ingenia Communities Group today announced a $150m equity raising to temporarily repay debt facilities, taking the pressure off the balance sheet whilst awaiting new investment opportunities.

The Placement comprises a fully underwritten placement to raise $135.0 million, and a conditional placement of $15.0 million to Sun Communities which is subject to ASX granting a waiver of ASX Listing Rule 10.11 to enable Sun Communities to participate. Ingenia currently anticipates that ASX will make its decision in relation to the waiver by Friday 1 May 2020.

The Placement price of $3.45 per security represents a -6.5% discount to last close of $3.69 on 29 April 2020. The share issue also represents a -33% discount to the pre-COVID19 high of $5.20. The SPP issue price will be the lower of the Placement price and a -2% discount to the 5-day volume-weighted average price of Ingenia securities up to, and including, the closing date of the SPP.

The proceeds from the Equity Raising will be initially be used to repay debt and to then enable the Group’s to grow its asset base, in-line with Ingenia’s strategic objectives.

Following the capital raising, the Groups pro forma LVR will reduce to 10.9%, down from 24.9% (as at 31 December 2019), and available undrawn debt and cash will increase to $352 million.

The Group has a proven track record of securing and integrating acquisitions in this market segment where ownership remains fragmented. With $352 million in cash and available undrawn debt following completion of the Placement, Ingenia will be well capitalised and able to take advantage of emerging market dislocation.

Ingenia’s CEO, Simon Owen, said the Group’s track record of building a scalable business since internalising in 2012 places Ingenia in a strong position to deploy the proceeds from this equity raise and build a real position of balance sheet strength and market leadership.

“The Equity Raising provides additional capacity for Ingenia to continue to deliver on its key strategic priorities of scale and sector leadership. Our pipeline remains very strong and our dedicated acquisitions team are beginning to see new opportunities to secure quality assets emerge as a result of the dislocation being caused by COVID-19.”

“We expect to prudently deploy the additional capital from the Equity Raising over the next 12 – 18 months as we benefit from our current pipeline of acquisitions and emerging opportunities.”

The Group is already well progressed on acquisitions totalling approximately $60 million, which are expected to complete in calendar 2020 and following the Equity Raising will be well placed to act quickly to secure future growth.

“In addition to benefitting from further on-strategy acquisitions, the business continues to deliver stable rental cash flows from our portfolio of land lease and seniors’ rental communities. While holiday parks and new home sales have been impacted by Government restrictions, Ingenia remains well placed to benefit once restrictions are eased. We continue to operate in a market with solid long-term fundamentals, driven by an ageing population and societal housing affordability issues which will underpin longer-term returns,” Mr Owen said.

The Institutional Placement is fully underwritten by Citigroup Global Markets Australia Pty Limited, Goldman Sachs Australia Pty Ltd and Moelis Australia Advisory Pty Limited. The Conditional Placement is non-underwritten, such that if the Conditional Placement does not proceed, the total proceeds raised under the Placement would reduce by $15.0 million.