Assura plans £330m fundraise for development, refinancing

Assura announced a proposed share issuance on Thursday, to raise gross proceeds of up to £300m through the issue of up to 526,315,789 new ordinary shares by way of a firm placing, placing and open offer.

The FTSE 250 firm said it also wanted to raise additional gross proceeds of up to £30m through the issue of up to 52,631,578 new ordinary shares through an offer for subscription.

All would be priced at 57p per new ordinary share.

The board said the offer price represented a discount of 2.7% to the closing price of 58.6p per existing ordinary share on 15 November, but a premium of 7.3% to the company's last reported EPRA net asset value per ordinary share as at 30 September, of 53.1p.

“Assura has delivered substantial growth in its portfolio and income over the last three financial years,” the board said in its statement.

“The company has a strong investment pipeline and continues to see opportunities to make further investments in the primary care property market which is a sector which has attractive fundamentals and a track record of strong risk adjusted returns.

“The estimated net proceeds from the share issue will be used to make further investments into primary care properties and to reposition the group's balance sheet.”

Assura said it has successfully completed acquisitions for consideration of £174.1m between 31 March and 14 November, and it had a near-term pipeline of acquisitions and developments with a cost of approximately £209m, consisting of £126m of new acquisition opportunities and £83m of developments.

The company said it identified £126m of acquisition opportunities, which were anticipated to be under contract before 31 March 2018.

It said those opportunities predominantly represented individual sites where deals were being negotiated directly with the current owner.

In addition, it has a pipeline of £83m of developments that were on-site, or were expected to be underway over the next 12 months.

Assura said it currently has five schemes for development on site with a cost of £34.3m, with a further 12 identified development scheme opportunities with a value of £49m that were expected to have commenced within 12 months.

In addition, the board said it intends to refinance its Aviva senior secured term loans, which had a balance of £211.7m as at 30 September, with a weighted average interest rate of 5.43%.

The group anticipated that the associated break costs of that refinancing would be approximately £55m.

It said it would utilise the proceeds of the share issue to fund that break cost, and deploy £36m to further reduce its loan-to-value ratio, providing “substantial capacity” for further property investment beyond its current pipeline.

“Primary care remains at the heart of the NHS agenda,” said Assura CEO Jonathan Murphy.

“With Assura's development pipeline being the strongest it has been for many years, the anticipated proceeds of this fund raising will allow us to continue investing in the primary health care estate of the future and positions us at the forefront of this opportunity.”

Assura also issued its interim results on Thursday, with profits surging and a development pipeline that is 'strong'.