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Goodman Group Seeks A$1.8 Billion in Share Sale (Update2)
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By Sarah McDonald

Aug. 6 (Bloomberg) -- Goodman Group, an Australian real estate trust, is selling A$1.8 billion ($1.5 billion) in shares to investors including China Investment Corp. as it repairs a balance sheet dented by property writedowns.

CIC, the nation’s $200 billion sovereign wealth fund which extended Goodman a finance facility in June, will buy A$500 million in securities, Goodman said in a statement today. Institutional and existing investors will be offered A$1.3 billion in stock at 40 Australian cents each, an 18 percent discount to the last traded price.

Goodman posted a loss of A$1.12 billion for the year ended June 30, the company said, quoting partly-audited financial results. The Sydney-based company has also extended the repayment deadlines on A$4.1 billion of debt, it said.

“The implementation of these capital management initiatives has been key to de-gearing the group’s balance sheet,” Chief Executive Officer Greg Goodman said.

Goodman joins rivals including GPT Group, Stockland and Mirvac Group which have collectively raised more than A$4 billion in share sales since May to repair balance sheets ravaged by writedowns.

Goodman made an operating profit after tax of A$408 million in the year to June 30. That was wiped out by property and equity investment writedowns of A$1.4 billion, losses on derivatives of A$62 million and other non-operating losses of A$71 million, Goodman said.

Property Crunch

The company will pay a dividend of 9.65 cents per share, and will file its audited results by August 31.

Goodman expects a A$310 million full year operating profit after tax in 2010, which the company said would provide for a dividend of 3.4 cents a share.

Property stocks were amongst the worst hit worldwide as the credit crunch, triggered by the collapse of the U.S. subprime mortgage market, dragged much of the world into recession. An index of 16 property companies on the benchmark S&P/ASX 200 Index tumbled 58 percent in 2008. Goodman shares lost 84 percent in the period.

Goodman shares, which have been halted since Aug. 4, have fallen a further 34 percent this year.

The Canada Pension Plan Investment Board is investing A$163 million in a A$200 million joint venture with Goodman in mainland China, Goodman also announced today.

To contact the reporter on this story: Sarah McDonald in Sydney at [email protected]