Gryphon Capital Income Trust will give eligible Australian and New Zealand unitholders the chance to buy up to A$30,000 of new units at A$2.00 each. The non-underwritten offer could raise up to A$407.45 million for incremental portfolio management.
- Up to A$407.45 million targeted through 203.72 million new units
- A$2.00 issue price, a 0.17% discount to five-day VWAP
- Eligible Australian and New Zealand unitholders can apply for A$1,000 to A$30,000
- Offer opens on 11 November and closes on 25 November
- Applications may be scaled back at the Responsible Entity’s discretion
Gryphon Capital targets up to A$407 million
Gryphon Capital Income Trust (ASX:GCI) is taking another sizeable step to expand its investment capacity, offering existing unitholders up to 203,722,673 new units at A$2.00 each. If fully subscribed, the non-underwritten unit purchase plan would raise A$407.45 million.
The offer price matches the price paid by wholesale investors in the recent placement announced in September and represents a modest 0.17% discount to the Trust’s five-day trading VWAP of A$2.0034 through 5 November. Eligible unitholders must apply for at least A$1,000 and can seek up to A$30,000 of new units.
Retail offer follows September wholesale placement
The plan extends the capital-raising program outlined in the A$86.25 million wholesale placement, which was earmarked for incremental portfolio management. Today’s announcement does not state how much capital the Trust expects to raise in practice, only the maximum permitted under the offer.
That distinction matters. The offer is not underwritten, meaning the maximum proceeds are not guaranteed, while applications may also be scaled back at the Responsible Entity’s discretion. Any excess application money would be returned without interest if fewer units are allocated.
Funds assigned to incremental portfolio management
Gryphon Capital Investments, the manager, intends to use the proceeds to support incremental portfolio management consistent with the Trust’s investment strategy. The announcement does not provide a breakdown of intended investments or quantify the expected effect on portfolio income, distributions, liquidity or per-unit measures.
The offer is open to unitholders who held units at 7.00pm Sydney time on 5 November and have a registered address in Australia or New Zealand. Applications are expected to open at 10.00am on 11 November and close at 5.00pm on 25 November, with the results and any scale back expected on 27 November.
Final allocation will determine the capital impact
If the timetable proceeds as indicated, the new units are expected to be issued on 1 December and begin trading on the ASX on 2 December. The key unresolved figure is the final number of units issued: that will determine how much fresh capital reaches the Trust and how materially the unit base changes.
Bottom Line?
The headline raise is large, but its investment significance will depend on participation, any scale back and how effectively the additional capital is deployed.
Questions in the middle?
- How much of the A$407.45 million maximum will the non-underwritten offer ultimately raise?
- Will applications be scaled back, and if so, how will allocations be determined?
- What portfolio assets and income opportunities will absorb the additional capital?