Shares in property business Ingenia Communities Group (ASX: INA) have gone into trading halt. Is this a good thing?
About Ingenia
Established in 2004, Ingenia is a leading provider of affordable rental land-lease living and holiday accommodation. The company has more than 5,100 residents paying rent, and 869,000 tourism room nights available through a portfolio of 61 communities.
Trading Halt?
In an announcement to the ASX this morning, Ingenia requested a trading halt in the company’s shares while it undertakes an equity raising.
The company plans to raise $131 million in new capital via an entitlement offer and an institutional placement, to be completed at $3.93 per share. The shares last traded at $4.05, so the capital raising is at a 3% discount to yesterday’s closing price.
Largest shareholder Sun Communities Inc (NYSE: SUI) has said it intends to fully participate in the entitlement offer.
Use Of Funds
In the associated presentation, Ingenia has said it wants to continue to capitalise on a strong acquisitions pipeline, with $102 million of acquisitions under contract or in due diligence, including:
- Three existing lifestyle communities in NSW and QLD
- Two parcels of land adjoining existing communities
- A large greenfield site north of Sydney
A further $18.4 million is expected to be deployed as identified pipeline opportunities and developments progress. Hence, the need for the $131 million.
Ingenia also said the acquisition and equity raising are forecast to positively impact growth and have therefore upgraded FY20 EBIT growth guidance from 10% to 15% to now be in the range of 15% to 20%.
Ingenia shares are expected to resume trading on the ASX tomorrow.
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At the time of writing David does not have a financial interest in any of the companies mentioned.
