Medical centre investor and landlord Assura’s (AGR) plans to reduce debt and expand its portfolio have sent its shares plummeting 13.8% to 54p.

The steep fall is the result of the group intending to sell 618 million shares in a placing at 50p each, 21% lower than they were worth when the market closed on Wednesday evening. The deal includes a one new share for every five held open offer in a bid to raise £309 million overall.

Around half of the proceeds will reduce the real estate investment trust’s (Reit) debt, while the remaining £125 million will fund growth with Assura identifying £96 million worth of acquisitions and £27 million of development projects.

The deal depends on a shareholder vote on 12 October, with the new shares trading two days later if approval is granted.

Web - Assura - 24 Sept 2015

Management will increase the quarterly dividend by 10% to 0.5p a share from January due to increased rental income expected from the growth in its portfolio, which stood at £925 million on 31 March.

‘The shares have had a great run recently gaining 22% so far this month, but the 21% discount to the prevailing share price seems high,’ says Sanlam analyst Mark Cartlich. ‘We will revise our forecasts after speaking to management, but maintain our target and rating for now.’

Issue Date: 24 Sep 2015