Mirvac Halts Trading, Seeks More Cash

Sydney Morning Herald

Friday October 31, 2008

Carolyn Cummins Commercial Property Editor

MIRVAC is the latest real estate investment trust to call a trading halt as it finalises moves understood to include a capital raising to help its balance sheet.

Mirvac has a development pipeline of about $1.3 billion that must be funded by early next year. Analysts said the group could find a capital raising well supported, despite the market still raising cash for Goodman's $955 million issue this week and GPT's $1.3 billion capital raising last week.

Mirvac could also look to sell down some assets, if it can find buyers, as well as reducing its overseas interests.

After a fall of close to $1 in its share price in four trading days, the group yesterday requested a trading halt, saying the directors were "reviewing possible initiatives that currently remain incomplete and confidential".

The collapse in price to 98.5c prompted a query from the Australian Stock Exchange, to which the group responded: "Mirvac is not yet in a position to announce these initiatives and potential transactions as they (or some or any of them) may or may not be finalised".

Unless news is released today the trading halt will be in force until Monday morning.

Mirvac is one of the top 10 diversified REITs and the biggest residential developer in NSW. But it also has a funds management business as well as direct ownership of offices, hotels and retail malls.

It also owns the former Optus building at 101 Pacific Highway, North Sydney.

Mirvac has not escaped the impact of the weakening NSW residential market, despite its houses and apartments being aimed at the luxury end of the market.

Goldman Sachs JBWere's analyst Simon Wheatley said there were suggestions that Mirvac had $1 billion worth of refinancing to do by the end of this year.

Valad was also in the spotlight yesterday when it held its annual meeting to explain why its share price had dropped to 7.8c, from $1.20 in May.

Its chairman, Trevor Gerber, said that in response to market concerns, the board had withdrawn two resolutions for the meeting to give the chief executive, Peter Hurley, and the executive director, Stephen Day, who is on sick leave, bonuses and hefty performance fees.

Valad's remuneration report was rejected by 75 per cent of shareholders. "We are looking at all options and alternatives for Valad. That includes a takeover, sale of assets, revaluation of the business and a possible restructure," Mr Gerber said.

© 2008 Sydney Morning Herald

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