Sub-penny dreadful NZX-listed Promisia Integrative Ltd, which has a business model of developing & marketing unique natural products, changed course yesterday when it announced a proposed reverse listing – a conditional agreement to acquire 3 aged care facilities & the lease on another for $31.3 million.
Promisia’s share price doubled on 5 December to 2/10 of a cent, after 2 months at 1/10 of a cent ($0.001). The shares were suspended from quotation after the company’s announcement.
The company said it had agreed indicative terms for $17.3 million of debt finance and proposed issuing $8 million of shares to the vendor- the Brankin Family Trust, which is associated with Promisia director Tom Brankin – and $6-8 million to various private placement participants, all at 1/10 of a cent/share.
Under the conditional agreement:
- Promisia would acquire Ranfurly Manor & Nelson Residential Care Centre in Feilding and Eileen Mary Residential Care Centre in Dannevirke
- Promisia would acquire a long-term lease of Aldwins House in central Christchurch with a view to opening it as a rest home/hospital in 2020; an option to buy the property from interests associated with developer Ian Cassels of the Wellington Co Ltd is included in the acquisition
- The acquisitions would transform Promisia into a retirement village & aged care sector operator
- Promisia expects to complete the transition in the first quarter of 2020, assuming shareholders approve.
Promisia chair Stephen Underwood said the aged-care facilities were all profitable, with consolidated revenue of $12.7 million & ebitda of $2.4 million for the year to March 2019.
In addition, Promisia would acquire a company from the Brankin Trust which holds a long-term lease of Aldwins House at 62 Aldwins Rd, Christchurch, which had operated as an aged facility until it was severely damaged in the Christchurch earthquake. It’s recently been substantially strengthened & refurbished and, subject to final consents, is expected to open as a 147-bed rest home & hospital in the first half of 2020.
Mr Underwood said the land & buildings being acquired had development opportunities associated with them: “Resource & building consents are already in place for construction of a $14 million retirement village adjacent to Ranfurly Manor in Feilding. An arrangement for Mr Brankin’s interests to fund this development has been agreed in the sale & purchase agreement.”
Promisia has appointed Simmons Corporate Finance Ltd to prepare an independent report for the transaction, which the company aims to submit to regulators by Christmas, for issuing to shareholders in early February.
At that point, the company intends to call a shareholder meeting to approve the transaction.
Attribution: Company release.