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Retirement village operator Metlifecare is hoping to strengthen its balance sheet by suspending its dividend payment and raising up to $40 million in new shares.
Metlifecare's 82-per cent shareholder, Retirement Villages New Zealand, will support the raising planned for the first quarter of 2009. Australian-based RVNZ is a joint venture between banking giant Macquarie and property group FKP.
Metlifecare has been hit by the downturn in the domestic economy, particularly the weaker property market with revaluations in its large property portfolio contributing to a $54m annual loss. However, it still had positive operating cashflows, chairman Jim McLay said.
The operator planned to issue $30m to $40m in new shares by the end of March, with the proceeds used to reduce existing bank debt.
Existing shareholders would be able to take part. The board would make more details available once it finalised the appropriate structure, Mr McLay said.
Metlifecare would also suspend its dividend for the foreseeable future, to build up cash and reduce debt levels.
- NZPA
