New Zealand’s largest retirement operator Ryman Healthcare is planning to list on the Australian Securities Exchange as it taps Jarden, Craig’s and Forsyth Barr to raise about $NZ1bn ($A900m) of equity.
It has also downgraded its earnings guidance.
The offer by the company, which is already listed on the NZX, comes amid tough economic conditions across the Tasman will see its loans reduce to $NZ1.59bn from $NZ2.56bn.
The group is coming under pressure from its lenders, which have waived its debt covenants for the next three testing periods.
The raise comprises a $NZ313m underwritten institutional placement and about $NZ688m underwritten pro-rata accelerated non-renounceable entitlement offer.
Only two years, ago Ryman asked equity investors for almost $1bn in a quest to drive down its debt levels.
Investors were wall-crossed over the weekend and the deal has strong support from institutional shareholders, say sources.
Shares are being sold at $NZ3.05 each, a 29 per cent discount to the last closing price of $NZ4.31.
Ryman, which has been run by chief executive Naomi James since November, said the purpose of the offer was to improve its financial position and leave it well placed for recovering market conditions.
It told investors forecast free cash flow was expected to be around negative $NZ100m after previously guiding negative $NZ50m to $NZ100m.
Ryman has agreed with its banks to seek lender approval for any new village developments and any dividends paid through the covenant waiver period as covenants moved to 1.5 times earnings versus 2.25 times.
Ryman has 49 villages, 9722 retirement village units and 4698 aged care beds, employing over 7000 staff.
It said sales volumes had been steady through the third quarter of the year, but sales applications had declined, impacting projected sales volumes in the fourth quarter and over the first half of the 2026 financial year.
Targeted incentives and tactical pricing were expected to improve applications and drive sales into the second half of the 2026 financial year.
Ryman said it would review its dividend policy before the end of the 2026 financial year.
The company’s chairman Dean Hamilton said that the equity raise would reset the balance sheet, reducing gearing from 37.3 per cent to 23.1 per cent and provide Ryman with the foundations to deliver further transformation initiatives, with a renewed focus on its operational reset.
“We are on a journey and have already made significant transformation progress over the past 12 months, including our board, management and governance refresh, changes to our pricing model and moving to a functional structure.
“Resetting our balance sheet will support us to progress our business improvement programme further.”
In 2023, Ryman raised funds to pay down debt via a 1 for 2.81 accelerated pro rata entitlement offer where shares were sold at $NZ5 each – a 21.9 per cent discount to the last close.
Working on the deal at the time were Macquarie Capital and UBS.
Then, its market value was $NZ3.3bn, but now it is $NZ2.9bn.
That raise came after it was lacking in free cashflow and had been on the acquisition trail, acquiring sites in Australia.
While the argument had been that the acquisitions would be funded through free cashflow and unit sales, its debt had been growing, and it had not made the sales to support the loans.
Ryman said at the time that some of the funds would go towards repaying all of its $NZ709m US Private Placement Notes and reduce its debt level to 33.9 per cent from 45.3 per cent.
Its net debt before the offer was $NZ3bn, and it was reduced to $NZ2.25bn.
If Ryman had raised equity in 2021, as some has suggested should have been the case, it would have been raising when shares were at least $NZ13.
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