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National Storage REIT Announces $260M Capital Raising

National Storage REIT Announces $260M Capital Raising
The offer price of $1.58 per security represents an 8.7% discount to the closing price of NSR of $1.731 on Monday 27th June 2016.
Jul 05, 2016 By Ben Khouri Tags: NSR, Raising

National Storage REIT (ASX: NSR) have announced an offer to eligible retail shareholders to participate in a ‘accelerated non-renounceable entitlement’ offer of ordinary shares in NSR. The retail offer is in place from Tuesday the 5th of July, to Friday the 15th of July 2016. Previously, the institutional component of their equity raising was successfully completed on the 28th of June 2016, whereby through the institutional offering, National Storage had raised $212.9 million. 

Details of the Offer

Under the retail offer, eligible shareholders are able to participate in the placement, whereby they can purchase 3 new securities for every 10 National Storage securities they currently own, at a fixed price of $1.58 per security. Under the equity raising, National Storage are issuing an additional 164.5 million shares.

Comprising both the institutional placement and the retail offer, National Storage is seeking to raise $260 million. The proceeds from this offer will be used to finance the remaining 90% interest in the Southern Cross JV. Additionally, the funds will also be used to finance further acquisitions that are set out within their current strategy, along with strengthening the balance sheet.

The offer price of $1.58 per security represents an 8.7% discount to the closing price of NSR of $1.731 on Monday 27th June 2016.

Use of Proceeds

As mentioned previously, the funds raised will be particularly utilized in financing a series of acquisitions. With the most relevant acquisition being the Southern Cross JV. The Southern Cross portfolio is comprised of 26 centres, 24 of which are self-storage centres, with the remaining 2 being wine storage centres. Additionally, the Southern Cross portfolio is forecasted to have a FY17 EBITDA of $17.5 million.

FY16 has been one of National Storage’s most active year, in terms of acquisitions, with 23 acquisitions been announced across Australia and New Zealand (Not including the Southern Cross JV).

As at 11.54am, NSR has contracted over 1%, to approximately $1.60.

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Ben Khouri Author: Ben Khouri Jul 05, 2016

Ben Khouri is a financial editor for Wise-Owl with a particular focus on the top ASX 300 companies. Having a vast background in economics and finance, Ben provides financial commentary & analysis as well as global market updates, which guide investors in devising investment strategies. Ben specialises in analysing economic data and global events from around the world and examines the impacts they have on the major equity markets.

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