Latest offer

This Investment Statement offers investors the opportunity to purchase shares in Provincia Property Fund (Fund) at $1.10 per share which is a 32% discount to the Fund’s net tangible assets (NTA) per share of $1.62. The purpose of the capital raise was purchase an Interest Rate Swap (Swap) which will have the effect of reducing our interest rate over the next 3 years.

We have now completed our refinance using the Interest Rate Swap and this is in place. The forecast dividend return is 5.15 cents per share, which is a 4.68% return on a share price of $1.10.

We were able to complete the purchase of the Interest Rate Swap by using an underwriter, so we are happy to say we still have a limited number of shares available at $1.10, which is a 51 cent (32%) discount on the current NTA share price of $1.61.

This will be the last time we offer shares at this price.

Latest Investment Opportunity

This Investment Statement is being issued to enable the Fund to refinance its debt at a better fixed rate, which will improve the potential for higher dividend payments to investors and help mitigate future interest rate risk. By having a fixed interest rate there will be the added benefit that future rental increases will add directly to dividend payments.

The Board and Management have investigated and analysed all available options to improve the return to investors by reducing the interest the fund pays. We have considered reducing debt by selling a property, reducing debt by raising equity and various refinancing options. Analysis shows that if we reduce debt by selling properties or raising equity there is a dilution effect on the existing income, and there is little overall benefit. The refinancing options that were considered included interest rate swaps, refinancing with other banks, fixed rates with banks and lending from non-bank institutions. The most effective and immediately beneficial option is to purchase a 3 year Swap from ASB (our current bank) to cover all of the Funds’ current debt. This will reduce the effective interest rate from 7.85% to 5.25%.

This offer seeks to raise $2,418,010 by issuing 2,198,191 shares at the price of $1.10 per share to cover the price of the Swap and associated costs. This offer is a 32% discount on the current NTA share price of $1.62. The forecasted return to 31 March 2024 is 5.15 cents per share once we have the new interest rate secured, which is a return of 4.68% based on the offer price of $1.10 plus a capital gain of 32%.

Note we have now completed our refinance using the Interest Rate Swap and this is in place.

We were able to complete the purchase of the Interest Rate Swap by using an underwriter, so we are happy to say we still have a limited number of shares available at $1.10, which is a 51 cent (32%) discount on the current NTA share price of $1.61.

This offer is open to wholesale investors only.