NZX-listed syndication specialist property manager Augusta Capital is planning to raise $45 million new capital.
Augusta, which has been in a trading halt since yesterday, just announced plans for a $12.4m underwritten placement to institutional investors and $32.6m one for 1.9 pro-rata non-renounceable accelerated entitlement offer.
Former suitor Centuria Capitaland Centuria Funds Management intends taking up 15.6 per cent.
Augusta has suffered a number of blows lately:
• ASX listed Centuria suddenly withdrew its planned $180m full takeover of the business; • Augusta axed its newest syndicate which would have owned Albany retail properties and others properties, as well as its tourism syndicate. • Augusta was forced to forfeit its $4.5m deposit on a cancelled Albany property deal.
Last month, Augusta chairman Paul Duffy and managing director Mark Francis issued a brief joint statement to the NZX, saying Centuria had pulled out of the full takeover and giving no reasons for that being scrapped but saying the Australians had made that call.
"Augusta Capital advises that it has been notified by Centuria Capital that it is terminating the bid implementation agreement announced on January 29 and will not be proceeding with the takeover bid at this time. Augusta has no further information regarding the termination at this time but will update shareholders," the statement said.
Augusta says it manages about $1.83 billion of assets in the office, retail and industrial sectors here and in Australia.
The business headquartered in Bayleys House planned to launch the Augusta Property Fund syndicate whose assets would include the Albany Lifestyle Centre, which was also proposed to form part of the Augusta Property Fund.
But on April 29, Augusta told the NZX that deal was cancelled by the vendor: "While Augusta was not a party to that agreement, it had funded payment of the $4.525 million deposit which was to be reimbursed by the Augusta Property Fund once established. As a result of the cancellation of the contract, the $4.525 million deposit has been forfeited."
Augusta's board withdraw the initial offering of that new fund in light of Covid-19 lockdown and the effect on tenants who were forced to shut.
Mark Francis of Augusta. Photo / Brett Phibbs
"As a result of that lockdown, rental relief is likely to either apply or be sought by tenants and the Augusta board considered that the representations made in the fund's product disclosure statement were no longer correct. All money raised will be returned to registered investors," Augusta told the market on March 27.
The business was founded by Mark Francis in 2001, originally as a direct property investor but lately it has shifted into specialising in syndicates.
Francis and fellow Augusta executive director Bryce Barnett together own 23.3 per cent of the shares. Francis stood to gain significantly from the Australian takeover. Around the time it was made, his 17 per cent was worth around $30m including options. Barnett's 5.5 per cent was worth about $10m.
But Francis stressed at the time neither of the two men would get cash if they sold their shares to Centuria. They had previously made an undertaking to accept the deal when it was on the table, being issued with Centuria shares and striking a three-year employment agreement with Augusta.
So they could only get their $40m after the three-year period.
Then the pandemic hit and property stock values and building valuations plummeted.
Before the pandemic and global financial problems, Augusta valued the properties it managed at $2b while Centuria has A$7.3b of assets under management.
Asked about the potential for issues in the sector, Francis said this month: "We have been in this business for nearly 20 years and the reason we will be in it for the next 20 years is because we keep putting investors' interests first."
On March 10, separately listed Asset Plus announced it would raise $100m new capital. Augusta manages Asset Plus which owns 35 Graham St and a site at Albany where it plans for build Auckland Council's new northern hub.
Augusta planned a $1b Queenstown venture, Lakeview, with Australia's Ninety Four Feet and the Queenstown Lakes District Council. The 10-year seven-stage project was to result in new hotels, residential property, co-working and co-living space, shops and hospitality.
Augusta's investor presentation last year showed it forecast assets under management to reach $3b by 2022.
Augusta shares have fallen from February 20 when they were trading at $2.17 to yesterday at just 80c.
