The fate of a $1.49 billion purchase of one New Zealand's largest retirement village companies could hang in the balance after it was revealed this morning that the overseas takeover business had rights to pull
Covid-19 coronavirus: Metlifecare says $1.49b takeover deal on, Asia Pacific has termination rights
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A shareholder meeting is planned and Metlifecare said it aimed to send out more material on that next month in the hope of a May date, "subject to the Covid-19 restrictions."
Metlifecare has 5600 residents living in 25 villages. It issues rights to occupy then re-sells units, apartments and hospital beds when those are terminated. Its share price has plummeted, from $6.90 on February 26 to $4.83 now.
The takeover proposal emerged out of the blue just before Christmas and the NZ Superannuation Fund agreed to sell its 19.9 per cent stake.
In a further update today, Metlifecare said all development activity has stopped while the Level 4 restrictions were in place.
"Metlifecare's development programme is well suited to adapt to these changing conditions due to the reset in 2019 and building design that allows for partial completion," it said.
The Edgewater site in Pakuranga, where construction had only just now started, had now paused.
"The company's other development sites were in the process of completing civil ground works. Vertical/villa construction was due to start shortly – this can be delayed with no material cost to the business. The company's remediation programme has also been paused for the duration of the current Level 4 restrictions," it said, referring to its $44m leaky building issues.
"Metlifecare is well positioned with sector-leading low gearing, strong banking facilities and associated debt headroom to navigate through the current environment and is well poised to accelerate its development programme as soon as it is possible to do so," its statement said.
The World Health Organisation said virus fatality rates were around 21 per cent for those aged over 80.
Metlifecare said it was continuing to support residents needing care and "actively engaging" with all those who have signed occupation right agreements.
Several occupation right agreement settlements have been brought forward at the request of the incoming residents, enabling them to move earlier.
The company's sales and settlements are expected to be significantly restricted during the Level 4 lockdown with a consequential adverse impact on new sales and resales revenues in the next quarter.
The company will assist those who are looking to settle during the period of Level 4 restrictions to move into its villages or aged care homes as provided for under the "essential services" category, it said.
It would ensure all resident and care home changes complied with public health guidelines and requirements, It said.
"For example, new arrivals will be isolated as required. As part of its commitment to support residents in coming weeks, Metlifecare has implemented security access control to all retirement villages to ensure everyone is kept as safe as possible. Village teams have also mobilised to provide additional meal services and are working with the company's food wholesaler to ensure Metlifecare village residents are well supplied with necessary groceries and essentials," it said.
Interim cost-saving measures were aiming to offset some revenue reduction but sales and development capability were being maintained "so that we can promptly resume those activities as the restrictions are lifted".
• Covid19.govt.nz: The Government's official Covid-19 advisory website