Argosy to raise $87m in 1-for-7 rights issue at 89c apiece

The property investor plands to repay bank debt used to acquire properties this year.

Argosy Property plans to raise about $87 million in a rights issue to repay bank debt used to acquire properties this year.

The company plans to sell shares at 89 cents apiece in a one-for-seven renounceable offer, it says in a statement. The offer is underwritten by First NZ Capital.

The property investor raised a similar amount in a placement in December, of $80 million at 88 cents a share. It followed up with a share purchase plan at the same price in February, raising another $20 million.

Recent purchases include Progressive Enterprises' main distribution centre in Mangere, Auckland, for $74 million, and the Vector Centre, in Newmarket, Auckland, for $22.3 million.

"The board considers it appropriate to raise equity capital to repay bank debt incurred by Argosy to complete its recent acquisitions and to provide financial flexibility for future acquisitions," chairman Mike Smith says.

Argosy shares fell 3.1 percent to 95 cents when they resumed trading from a halt and have dropped 7.7 percent this year.