Directors of Kingston Properties Limited, which trades as KPREIT on the stock market, have come out of a board meeting with plans to raise fresh capital for the company, and it’s expected to be facilitated in part by an additional public offering, APO.
Shareholders will, at a meeting date to be announced, vote on doubling the maximum number of authorised shares of the company to two billion units and give their consent to KPREIT pursuing an additional public offering of the new ordinary shares.
The real estate investment trust will also use the opportunity to get approval on an amendment to the company’s articles of incorporation to allow for electronic meetings, given the public gathering restrictions put in place by the Government to slow down the growing number of COVID-19 cases across the island.
“The board intends to convene an extraordinary general meeting in due course subject to, and in compliance with, the prevailing restrictions contained in the orders under the Disaster Risk Management Act,” KPREIT said in a notice posted on the Jamaica Stock Exchange.
Kingston Properties’ announcement to return to the equities market comes a year after it conducted a $2-billion rights issue, and less than a month after the company spent $607.5 million on its most recent acquisition, a four-acre property on East Ashenheim Road in Kingston.
The real estate company currently has 677.7 million ordinary shares in issue on the market valued at $4.7 billion. CEO Kevin Richards, as previously reported, wants to see the market double to $10 billion and has been going for it using a series of measures. It’s still unclear how much of that gap would be covered by the APO, as the company has not revealed its fundraising target from the share offer.
“The recommendation is in keeping with its strategic plan to substantially increase the equity base of the company, and will facilitate the company’s return to the equities market to raise funding, which will include an additional public offering in the near future, subject to the approval of its shareholders being obtained,” KPREIT said.
Any additional cash raised, in conjunction with bank loans, would finance the acquisition of tenanted properties that meet the company’s criteria of earning a net yield of 7.0 per cent or higher per annum.
The real estate investment trust has over its 12 years of operation, invested in a mix of commercial and residential properties, including office buildings, warehouses and condominiums, in the United States, Jamaica and the Cayman Islands.
For the quarter ended September, the profit reported by KPREIT at US$413,551 was tenfold its earnings for the comparative period of 2019, on the back of increasing rental income. The performance also wiped out losses of US$343,397 the company posted over six months ending June.
Kingston Properties also doubled its assets year over year to US$44.8 million, which included cash resources of US$4.68 million.
