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Precinct Properties Subordinated Convertible Notes Offer Details

Precinct Properties New Zealand Limited (Precinct) has announced the final details on the offer of subordinated convertible notes (Notes). On 4 September 2017 the interest rate for the Precinct Notes was set at 4.80% per annum, for a four-year term to 2021.

Following the four-year term the Precinct Notes are expected to be converted into Precinct ordinary shares. The size of the General Offer of Precinct Notes has been set at $125 million and the Priority Offer is set at an additional $25 million.

Please contact an Adviser before 3:00pm on 14 September 2017 if you are interested in participating in the Priority Offer and 5:00pm 20 September 2017 for the General Offer.

This offer is being made in accordance with the Financial Markets Conduct Act 2013 and the Notes are expected to be quoted on the NZX Main Board (PCTHA).

Please refer to the Product Disclosure Statement for full details of the Offer. A Terms Sheet and Investor Presentation are also available. You should read the Product Disclosure Statement carefully before applying for the Notes, and understand the benefits and risks of investing in these Notes.

Summary of Offer

Issuer  Precinct Properties New Zealand Limited.
Description of the Notes             Subordinated convertible notes.
Offer Amount

$150 million, comprising:

  • The Priority Offer of $25 million, which is open only to Precinct NZ Retail Shareholders.
  • The General Offer of $100 million (with the ability to accept oversubscriptions of $25 million at Precinct’s discretion).
Conversion Date 27 September 2021
Conversion

On the Conversion Date, all outstanding Notes will be Converted into Shares, subject to a Cash Election as described below.

The number of Shares into which each holding of Notes Converts will be determined by dividing their Principal Amount ($1.00 per Note) (together with any Unpaid Interest (including any interest thereon)) by the Conversion Price, which is the lesser of: 

a)    the Conversion Price Cap of $1.40; and

b)    a 2% discount to the Market Price.

The following table illustrates the number of Shares to be issued on Conversion and the value provided at a range of possible Share prices.

Example Market Price

 

Conversion Price

 

Principal amount invested in the Notes

 

Number of shares received

 

Value of Shares received

 

Amount to be paid if Cash Election selected

 

$1.25

 

$1.225

 

$10,000

 

8,163

 

$10,203.75

 

$10,203.75

 

$1.30

 

$1.274

 

$10,000

 

7,849

 

$10,203.70

 

$10,203.70

 

$1.35

 

$1.323

 

$10,000

 

7,558

 

$10,203.30

 

$10,203.30

 

$1.40

 

$1.372

 

$10,000

 

7,288

 

$10,203.20

 

$10,203.20

 

$1.45

 

$1.40

 

$10,000

 

7,142

 

$10,355.90

 

$10,355.90

 

$1.50

 

$1.40

 

$10,000

 

7,142

 

$10,713.00

 

$10,713.00

 

Cash Election Rather than Converting the Notes into Shares, Precinct may elect to instead pay a cash amount to Noteholders at the end of the term. In this case, Noteholders would be paid an amount equal to the Market Price (calculated as set out above) of all the Shares that would have otherwise been issued to them on Conversion of their Notes, so that they receive an equivalent value to those Shares (as determined under the terms of the Notes) and will similarly benefit from any appreciation of the Share price above the Conversion Price Cap of $1.40 prior to the Conversion Date.
Interest Rate

On 4 September 2017 the interest rate for the Precinct Notes was set at 4.80% per annum, for a four-year term to 2021.

Margin 2.25% to 2.45%.
Interest Payments Interest is scheduled to be paid quarterly on 27 March, 27 June, 27 September and 27 December of each year, in arrear in equal amounts.
Interest Suspension

Payments of interest on the Notes will be suspended in certain circumstances as set out in the PDS.

Any suspended interest payment (Unpaid Interest) will accumulate and interest will accrue on it at the Interest Rate (compounding on each Interest Payment Date) until paid. No dividend or other return will be made to Shareholders while any interest on the Notes is suspended.
Issuer Credit Rating Not rated
Listing NZX Main Board (PCTHA).
Rate Set Date 4 September 2017.
Offer Opens 5 September 2017.
Offer Closes

General Offer: 22 September 2017

Priority Offer: 19 September 2017

Issue and Allotment Date 27 September 2017.
Minimum Application

General Offer: $5,000 and in multiples of $1,000 thereafter.

Priority Offer: $1,000 and in multiples of $1,000 thereafter.

Issue Price $1.00 per Note.


DISCLOSURE:

Deutsche Craigs Limited, a wholly owned subsidiary of Craigs Investment Partners Limited, has been appointed as a Joint Lead Manager to the offer and will receive a fee for undertaking this role.

In addition Craigs Investment Partners Limited will receive fees of 0.50% on the Notes that it distributes under the Offer. No brokerage will be payable by an investor.

Craigs Investment Partners Limited is a NZX Participant firm. A Disclosure Statement is available free of charge on request.

As the financial information detailed in this document does not constitute advice please contact an Investment Adviser should you wish to receive advice relevant to your personal circumstances.
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