FKP Property reviews business, to raise up to $150m12:18,...

FKP Property reviews business, to raise up to $150m
12:18, Wednesday, 15 October 2008

Sydney - Wednesday - October 15: (RWE Aust Business News) - FKP
Property Group (ASX:FKP) has started a review and made a strategic
placement of securities with Stockland (ASX:SGP).
FKP will also conduct an accelerated non-renounceable entitlement
offer seeking to raise up to $150 million.
Under the entitlement offer, FKP will issue five new securities
for every 14 securities held on the record date at a fixed price of
$1.50, which will result in the issue of up to 100m securities.
Under the entitlement offer, Mulpha Australia, FKP's largest
security holder, and Stockland have committed to subscribe for 35m and
34m securities respectively (including their pro rata entitlements), such
that the minimum funds raised under the entitlement offer will be $104m.
The number of securities allocated to Mulpha and Stockland may be
scaled back from their total commitment, subject to the level of
subscriptions received from other FKP security holders.
Combined, the placement and entitlement offer will raise a
minimum of $132 million for FKP.
These funds will be used to strengthen the balance sheet,
reducing pro forma gearing to approximately 35pc.
This places FKP in a strong position in light of the current
volatility in debt and equity markets worldwide.
The funds raised will also assist in funding the committed
development pipeline.
FKP's review includes exploring further opportunities with
Stockland, particularly in relation to the retirement assets.
In light of the strategic review and the potential for the
recycling of income-producing assets, FKP believes it is no longer
appropriate to maintain specific profit guidance for the financial year
ending 30th June 2009.
FKP has also reviewed its distribution policy in light of the
current capital markets environment and believes it is prudent to retain
the majority of cash earnings to retire debt and fund working capital
requirements.
For the interim distribution for the period to 31st December
2008, FKP will distribute all taxable earnings from the FKP Property
Trust but will pay no dividend from FKP Ltd.