On 26 June 2019, Cromwell Property Group (ASX:CMW) (Cromwell) announced that it would launch a security purchase plan (SPP) to raise up to $30 million and to allow Eligible Securityholders1 the opportunity to purchase up to $15,000 worth of new stapled securities in Cromwell (New Securities), without paying any brokerage or transaction costs.
Cromwell has identified a number of strategic growth opportunities across both its Indirect and Direct Property Investment segments that will be funded with proceeds from an institutional placement (Placement)2 and SPP, recycling of existing capital and introduction of new capital partners. This includes over $1.0 billion of acquisition opportunities as part of its ‘Invest to Manage’ strategy that were, at the date of the announcement of the SPP, either in exclusive due diligence or advanced negotiations3. The proceeds, along with recycled capital from asset sales, will also provide certainty of funding for over $1.0 billion of value-add development opportunities across Cromwell’s existing Australian Core+ and Active real estate portfolio. Prior to funding the identified opportunities, proceeds will be used to repay bank debt.
Cromwell provided preliminary guidance4 for FY20 in its ASX announcement and investor presentation for the Placement which were released on ASX on 26 June, of operating profit of 8.1-8.3 cps and distributions of not less than 7.5cps5.
The SPP is being offered to Eligible Securityholders, being holders of Cromwell stapled securities at 7.00pm AEST Tuesday 25 June 2019 with a registered address in Australia or New Zealand, to provide them with the opportunity to increase their holding in Cromwell on terms similar to those of the Placement, namely at a price of A$1.15 per New Security (Offer Price). Participation in the SPP is entirely optional.
Cromwell expects to raise A$30 million6 from the SPP. If the total value of applications for New Securities exceeds A$30 million, Cromwell has the absolute discretion to either accept all or part of the over subscription or to scale back applications. If applications are scaled back, and you have applied for New Securities, you will not receive the full number of New Securities you have applied for and the balance of your application monies not applied to purchase New Securities under the SPP will, if equal to A$2.00 or more, be refunded to you7.
Cromwell will make an announcement to the ASX on or about Friday 26 July 2019 on the outcome of the SPP and number of New Securities to be issued.
What to do next
The SPP opens at 9.00am AEST Wednesday 3 July 2019. If you decide to participate in the SPP, you can choose to apply to purchase one of the following parcels of New Securities at an Offer Price of A$1.15 per New Security: A$5,000 of New Securities (4,347 New Securities), A$7,500 of New Securities (6,521 New Securities), A$10,000 of New Securities (8,695 New Securities), A$12,500 of New Securities (10,869 New Securities) or A$15,000 of New Securities (13,043 New Securities).
If you are an Eligible Securityholder, you may apply for New Securities by carefully reading the Security Purchase Plan Booklet and then either:
- completing your personalised Application Form (which can be accessed online here)8 and submitting it together with your payment. Your Application and payment must be received before 5.00pm AEST Wednesday 24 July 2019; or
- making a BPAY® payment in accordance with the instructions on your personalised Application Form. Your payment must be received before 5.00pm AEST Wednesday 24 July 2019. If you make your payment by BPAY®, you do not have to complete the Application Form.
You should read the Security Purchase Plan Booklet carefully and in its entirety before deciding whether to participate in the SPP. You should also be aware that the Security Purchase Plan Booklet does not include all available information on Cromwell and should not be used in isolation as a basis of a decision about whether to invest in Cromwell. Any potential investors should refer to Cromwell’s public releases and statutory reports when considering an investment in Cromwell.
This website does not contain, and nothing in this website should be taken as, financial product advice. The information in this website is general information only, and does not take into account any person's individual objectives, taxation position, financial situation or needs. If you are unsure of your position, please contact your financial, taxation or other professional advisor.
What if I have more questions?
If you have any questions about the SPP, please contact Link Market Services Limited (Cromwell’s registry provider) on 1300 550 841. If you have any questions about whether an investment in Cromwell through the SPP is appropriate for you, please contact your financial, taxation or other professional adviser.
Summary of important dates9
|Record date (for determining eligibility to participate in the SPP)||7.00pm AEST Tuesday 25 June 2019|
|Announcement of SPP||Wednesday 26 June 2019|
|Opening date for applications||9.00am AEST Wednesday 3 July 2019|
|Closing date for applications||5.00pm AEST Wednesday 24 July 2019|
|Allotment and issue of New Securities||Wednesday 31 July 2019|
|Dispatch of Securityholder statements and normal trading of New Securities begins on the ASX||Thursday 1 August 2019|
- Cromwell has determined that, because of foreign securities laws, it is not practical for holders of Cromwell stapled securities with registered addresses outside Australia and New Zealand to participate in the SPP. See Section 2 of the Security Purchase Plan Booklet for full details.
- On 27 June 2019, Cromwell announced that it had successfully completed an institutional placement, which raised A$375 million.
- There is no certainty that any of these opportunities will complete.
- Guidance includes the impact of the Placement and assumes partial reinvestment of the Placement proceeds.
- cps refers to cents per security.
- If Cromwell receives applications in excess of A$30 million, Cromwell reserves the right to either increase the amount raised by accepting all or part of the oversubscription amount or to scale back applications, to the extent and in the manner it sees fit.
- Given the cost of processing and mailing cheques, Cromwell has decided that amounts under A$2.00 will be aggregated and donated to charity.
- Eligible Securityholders that have not elected to receive communications electronically will also have a paper copy of the Security Purchase Plan Booklet and Application Form posted to their registered address.
- This timetable is indicative only and subject to change. Cromwell reserves the right to alter the above dates at its discretion, subject to the ASX Listing Rules, the Corporations Act and any other applicable laws.