One of the more odd equity raisings I've seen, if I understand the details correctly.
ECF will be acquiring $41.5m worth of units in an unlisted commercial office property joint venture (unlisted trust) managed by Elanor (ASX.ENN). The unlisted trust is geared at about 55% (from Core Property Research); hence the reporting of look-through-gearing now.
The odd part is that ENN will be gifting ECF shareholders $8.4m to facilitate the purchase:
"Elanor Investors Group (ENN) has provided a deed of commitment for the Elanor Contribution which is conditional upon a successful completion of the Offer and Acquisition and will be made through an ECF sub-trust and will not participate in the capital or income of ECF and is not subject to redemption." (emphasis added)
...hence, the raising is for less than $41.5m (plus fees), i.e., only $36.6m is being raised; but the fees are substantial (in percentage terms) at a whopping $3.9m: ASX.ENN giveth and taketh away.
In the final analysis, ECF's NTA will not decrease, due to ENN's gift. The distribution yield has also been re-confirmed. ENN probably felt some pressure, given they did a (large) raise not long ago, and the share price as struggled to some degree because of it.
According to Core Property Research, the newly purchased property is under-rented by approximately 25%. With a short WALE of 2.6 years, this property will go some way to offset the substantial over-rented situation facing ECF that is likely to unfold with the Workzone West (Perth) property (date: mid 2025).
ECF Price at posting:
$1.10 Sentiment: None Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)