Goodman to unveil details of financing packageCarolyn Cummins...

Goodman to unveil details of financing package
Carolyn Cummins Commercial Property Editor
June 14, 2009

GOODMAN GROUP is tipped to make public the details of its expected refinancing package with Macquarie Bank and two overseas players this week, amid investor confusion as to why its share price has risen by as much as 40 per cent in the past week.

It closed last week at 45c, up 5.5c. There were suggestions the refinancing scheme would be offered in two stages, with Macquarie taking up a stake through 414 million convertible options and the Chinese Investment Corp and Canadian Pension Fund taking a cornerstone interest in the group.

Goodman's chief executive, Greg Goodman, was reluctant to issue more units, but there is also talk that he is negotiating a capital raising of as much as $1 billion.

It has also been suggested the group may look to restructure the ownership of its Asian investments.

Brokers say that despite the more than $15 billion that has been raised by property trusts through the equity markets in only nine months, investors' appetite may still be large enough to absorb a raising by Goodman.

Two weeks ago the group was issued with a query by the ASX about its share rise. It replied that apart from the continuing discussions with its financiers there was no other reason for the rise.

Goldman Sachs JBWere's property team has said a one-for-one entitlement issue at 40c could be on the cards, although at that price it does not attribute any value to the funds management and property services business.

"Realistically, a strategic investor would be required to underwrite the issue," said a Goldman analyst, Peter Zuk.

"Importantly, the funding issues [will] be addressed until the end of 2011. This would create a very interesting dilemma for institutional investors."

Meanwhile, overseas investors are taking advantage of low prices by snapping up shares in Stockland and Mirvac.

The US's ING Clarion has been a keen buyer of both trusts, which has bumped the holding by the entire ING Management group to 5.84 per cent in Mirvac and 5.18 per cent in Stockland.

ING Clarion has bought the bulk of the shares in each trust, some through recent capital raisings and the rest through general market trades at various prices. Brokers said the buying indicated a rerating by overseas investors of the Australian trusts, which have all had more than 60 per cent wiped off prices in the past 12 months.

Another drawcard is the constant speculation that following the publication of 2008-09 full-year accounts in August, there could be another round of mergers, with the bigger trusts swooping on those that have failed to recapitalise in time for the next surge in the underlying property cycle.

Source: The Sydney Morning Herald