Estia Health is reportedly on track to meet its target of raising $136.8m in equity but has seen its share price fall to $2.44 this week.
The company released its strategic review and equity raising report on Monday, which included confirmation of Dr Gary Weiss taking over as Chairman from 1 January 2017. Pat Grier will be stepping down to take on a Non-Executive Director role.
The company raised about $72 million through an institutional offering to eligible shareholders for a discounted price of $2.10 that closed this week.
A further $65 million is expected to be raised through a retail offer that closes on 11 January.
According to the report, the equity will be used to reduce core debt by $131m.
It will also enable the company to pursue it’s “preferred business strategy” including greenfield and brownfield development and significant refurbishment during the 2017/18 financial year and to “operate with a management team focused on optimising core business”.
The strategic review reconfirmed Estia’s previous EBITDA guidance range of $86m-$90m, despite the revised changes to ACFI announced last week.
However, according to this report in the Australian Financial Review, Estia will need occupancy rates of 96 per cent for the rest of the year to hit guidance after below average months in October and November.
Amongst other measures to improve occupancy reported in its strategic review, Estia has identified 14 underperforming homes, which it will focus on immediately with action plans in progress.
Attention will also be given to operational efficiencies through activities including the renegotiation of significant contracts such as food, physiotherapy and medical supplies.