Augusta Capital Ltd has entered into a development agreement with Airways Corp of NZ Ltd and the existing Augusta-managed syndicate that owns Airways’ Christchurch premises.
Augusta managing director Mark Francis said on 22 December the agreement provided for the development of a new “importance level 4” building which will house part of Airways’ new air traffic management platform. In return, Airways is committing to:
- an extended 25-year lease term on the new building & 2 of the existing buildings (effective from practical completion, which is expected to occur in mid-2019); and
- a 9-year lease term on the remaining building (which begins at a date elected by Airways between 12 & 18 months after practical completion)
Mr Francis said the agreement was conditional on receipt of a resource consent, approved funding terms & the approval of the investors in the existing syndicate which owns the property. These conditions are due to be satisfied by 30 January.
To fund the landlord’s development obligations, Augusta Capital subsidiary Augusta Funds Management Ltd proposes to re-syndicate the property, giving existing investors a preferential right to invest in it.
Mr Francis said Augusta Capital would underwrite $15 million of the $22.75 million of equity proposed to be raised in the resyndication, and a third party would underwrite the balance.
In addition, Augusta Capital has guaranteed the existing syndicate’s obligations, which will be released once the new syndicate is established and the required equity & debt raised.
Augusta expects the new syndicate to be established by 29 March.
Attribution: Company release.