Publicly-listed Kinetic Growth Fund (KGF) has acquired three prime real estate assets in the Suva central business district valued at $13.3million.
The property portfolio was acquired from Kelton Investments Pte Ltd in exchange for a mmix of cash and equity.
The properties to be acquired are:
- Naibati House – three-storey building; and three tenants
- Korobasaqa House – three-storey building with basement; leased to Ministry of Finance
- Gunu House – three-storey office building; leased to Ministry of Finance
A market announcement on the South Pacific Stock Exchange stated the properties will transfer as going concerns, with property management to remain substantively the same.
Under the terms of the transaction, payment by KGF will involve:
- $4.4million in cash to Kelton or its nominees
- The issue of 7,289,286 KGF shares to six parties who are shareholders of Kelton. Each of the parties is an independent investor and shares will be issued in six parcels ranging from 699,766 to 3,333.000 shares (equivalent to 6.3 per cent to 29.9 per cent of total issued capital post-transaction).
- The Sale and Purchase Agreement for the transaction has now been executed by the relevant parties and anticipated to close within 90 days.
The company stated the cash portion of the transaction was being financed through bank debt.
“The financing is through a mortgage on the three properties with a conservative loan-to-value ratio. Negotiations with financiers are at an advanced stage and it is anticipated that this will be completed in a matter of days,” KGF chairperson Erik Larson said.
“The high-quality property portfolio will be cash flow positive, and we expect that KGF will move immediately to profitability.
“The deal is strongly value accretive and by our calculations, has the potential to increase KGF’s net asset value per share by around 15 per cent.
“Having this property portfolio provides a strong platform for future growth for KGF. We are particularly excited to be able to partner with Kelton, an established and successful business in Fiji.”
