From the Globe & Mail, July 18:-
Brookfield to raise $400-million
Developer building war chest by going to capital markets for third time this year
BY LEONARD ZEHR
Real Estate Reporter
Brookfield Properties Corp. is going to the capital markets for an unprecedented third time this year as it builds a war chest for property acquisitions.
The Toronto-based developer is selling just over 21 million common shares at a price of $19 each to an investment dealer group led by CIBC Wood Gundy Securities Inc. for proceeds of $400-million.
The issue brings Brookfield's equity financings this year to $1.3-billion, nearly half of the $3-billion that the entire real estate sector has raised this year or is in the process of raising.
Proceeds from the latest issue will be used to finance "pending acquisitions and repay indebtedness," Brookfield said in a statement.
We have two or three things that we're working on and they should be announced in the next short while...maybe by the end of August," Brookfield's President, Bruce Flatt, said in an interview yesterday.
Mr. Flatt declined to identify any specific targets. When asked whether Brookfield was looking to buy several premier properties from associate Gentra Inc., he said "that's one possibility."
Gentra has in its portfolio Toronto's Exchange Tower and Calgary's Fifth Avenue Place, two office and retail complexes valued at a total of about $500-million. Investment sources have suggested that those properties could be sold in a possible reorganization of Toronto-based Gentra, a merchant bank, this year.
At Brookfield's annual eeting this spring, chairman Gordon Arnell said the company's acquisition plans include one portfolio of Canadian properties and others mainly in the northeastern United States.
"Some of them are what we're talking about." Mr. Flatt said yesterday.
Portions of Brookfield's earlier financings this year were used to purchase an additional 25-per-cent interest in New York-based World Financial Properties LP for $220-million and a parcel of land under Brookfield's BCE Place in Toronto for about $105-million.
Mr. Flatt said the latest stock issue will reduce Brookfield's ratio of debt-to-market equity to 1.7-to-1 from about 3-to-1 last year.
In February, Brookfield sold $300-million of common stock and $300-million of convertible debentures. It followed that up with another $300-million common stock offering in May.
EdperBrascan has agreed to buy about 105 million shares from the latest isue at a cost of $200-million. The purchase will give EdperBrascan ownership of 52 per cent of Brookfield's 138 million shares outstanding on a fully diluted basis.
Brookfield is involved in real estate management, land development and home building. |
