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Charter Hall announces growth equity raising


Charter Hall Group (ASX: CHC) (Charter Hall or the Group) today announces the launch of an equity raising comprising:

  • a fully underwritten $225 million Institutional Placement;
  • a non-underwritten Security Purchase Plan to raise up to $10 million;
  • a $4.78 per security fixed issue price, representing a 2.8% discount to Charter Hall's closing price on 20 May 2015; and
  • new securities will rank equally with existing securities and will be entitled to the full distribution for the six months ending 30 June 2015.

Benefits and Impact of the Equity Raising

Charter Hall is undertaking the equity raising to:

  • enable the Group to fund identified equity investments alongside its capital partners; and
  • provide capacity for future co-investments as growth opportunities are identified alongside new and existing partners.

Charter Hall Joint Managing Director, David Southon said:  "The Group is focused on its two key earnings streams, being property funds management earnings generated from the provision of property and support services to its funds management platform; and property investment income generated from co-investing alongside the Group’s capital partners in a range of property funds and partnerships. The equity raising will enable the Group to continue to drive growth in these key earnings streams and expand its diversified Australian platform."

Of the Institutional Placement proceeds, $175 million (approximately 78%) has been committed to fund co-investment opportunities alongside capital partners. The balance of the raising proceeds will increase Charter Hall's available capacity for additional growth opportunities.

Including the impact of the equity raising, Charter Hall reaffirms its guidance as follows:

  • absent unexpected events, FY15 guidance is 7-9% growth on FY14 operating earnings per security; and
  • the distribution payout ratio range is unchanged and is expected to be between 85% - 95% of operating earnings per security.

Joint Managing Director, David Harrison said: "The Group has continued its strategy of co-investing with capital partners having invested over $170 million alongside $1.1 billion of external equity during 2014, creating funds under management growth of $2.1 billion to a total of $12.7 billion as at 31 December 2014. This growth has continued in 2015 across the unlisted platform where investor demand for pooled funds, partnerships and syndicates continues to support our long WALE strategies and resilient income investment themes. The current equity raising will support the growth of our existing funds and accelerate the creation of new investment products.”

Details of the Security Purchase Plan

Following completion of the Institutional Placement, eligible securityholders will be offered via a Security Purchase Plan, the opportunity to apply for up to $15,000 of new securities, free of brokerage and transaction costs. The new securities will be offered at the same price as the Institutional Placement of $4.78 per security. The Security Purchase Plan will be capped at $10 million. New securities will rank equally with existing securities and will be entitled to the full distribution for the six months ending 30 June 2015.

Further information on the Security Purchase Plan will be lodged with the ASX and sent to eligible securityholders in due course.

Management Briefing

Charter Hall will be hosting a market briefing at 5:00pm (AEST) today, 20 May 2015, covering the equity raising. Charter Hall directs parties to the accompanying presentation which contains further information and details on the equity raising.


View PDF version of ASX release > 

View PDF version of Charter Hall Group Growth equity raising presentation >