Metlifecare may raise after EQT dumps offer

Debate is raging over whether Metlifecare will try to raise equity after EQT Infrastructure walked away from a takeover.

Metlifecare is one of New Zealand’s largest retirement village providers. It is listed in Australia as well as across the Tasman.

It had earlier recommended a deal worth close to $1.5bn for private equity — EQT Infrastructure — to buy it.

However, Metlifecare announced last week that EQT was trying to back out of the deal, citing ‘‘material adverse changes’’ due to COVID-19 that would impact its value by more than $100,000 and its net profit by at least 10 per cent.

Metlifecare is seeking legal advice and believes EQT cannot legally walk away from the agreement.

The company has construction-related debt worth about $NZ300m but plenty of headroom. It has about $4m of cash on its balance sheet.

Some close to the retirement village operator have dismissed suggestions of a raising, saying its debt position did not justify it.

But even so, a raft of raisings in a number of sectors are expected in the coming days.

Elsewhere, Australian internet provider Spirit Telecom has announced a capital raising.

Shares in the $48.67m company were in a trading halt over the Easter weekend pending an announcement by Wednesday.

Spirit Telecom made a $740,000 loss for the six months to December. Its revenue was $12m and its underlying earnings before interest, tax, depreciation and amortisation $1.6m.