FKP Property Group is to raise about $208 million through the issuing of about 1.04 billion new securities to cut debt.
Its largest shareholder Mulpha, with 26 per cent, will take up its offer. The offer was issued at a deep discount to the last traded price of 38? before the stock went into a trading halt.
The capital raising, which was underwritten by Goldman Sachs, was unveiled at the same time as FKP released a statutory loss of $350.3 million for the year to June 30.
That compared with a net profit of $82.3 million in the 2011 year. An annual distribution of 2.8? was paid, down from 3?.
The group did not issue any formal guidance for the 2013 year except to say the directors "target stronger 2013 financial year performance in a tough trading environment".
Contributing to the loss was a 24 per cent write-down in the fair value of the retirement portfolio and a 48 per cent reduction in contributions from the residential arm.
Excluding the write-downs, the net profit to June 30 was $94.7 million, which was in line with market guidance, but was down 22 per cent on the previous year. The commercial and industrial division performed well with the newly refurbished 465 Victoria Avenue, Chatswood tower well leased.
FKP's chief executive, Peter Brown, attributed the earnings decline to the challenging market conditions and the delay of settlements at the Aerial apartment development in Camberwell.
He said in the coming year FKP would look to further reduce debt, through asset sales and a stringent capital management policy. It would also focus on boosting the residential and commercial development projects.
Earlier this month Mr Brown flagged his intention to retire from FKP by next February after the completion of a strategic review of its retirement portfolio. "FKP is continuing to explore a demerger or other separation of its Retirement and Development/Property Trust businesses," Mr Brown said.