Lendlease Taps the Market for $1.5bn

Lendlease has launched a $1.15 billion capital raising in order to bolster its balance sheet and protect its $112 billion global pipeline amid current economic uncertainty.

The sizeable equity placement comprises an institutional placement of $950 million and a further $200 million that will be offered to eligible security holders.

The company, which has seen its available liquidity increased to $3.95 billion, also withdrew previous commentary on outlook from its previous interim results announcement.

Lendlease chief executive Steve McCann said the equity raising, coupled with the actions the company had already taken, would aim to strengthen the group’s balance sheet position in the short-term.

Lendlease said the raise, bring underwritten by Morgan Stanley, Goldman Sachs and UBS, would put the company on the front foot, enabling it to take advantage of investment and development opportunities as markets stabilised.

In February, the company's outlook had been bouyed by the sale last year of its struggling engineering business to Acciona, which had been approved by the Foreign Investment Review Board.

The outcome now seems a little murkier with Lendlease stating the deal was still in flux and “too early” to determine whether the conditions would be met within the time periods of the agreement.

A number of Lendlease’s developments, spanning 21 sites across nine cities, have continued to press ahead at a reduced level, by complying with social distancing and safety standards.

Other developments in offshore regions, including Singapore, Kuala Lumpur, Milan, New York and Boston, have been since shutdown through government mandates.

“Where necessary we have implemented safety pauses while we work through the required changes, such as we have done in London,” McCann said.

The halt to construction on a number of projects is likely to further weigh on the company's bottom line after it reported a 13.2 per cent decline in after-tax profit for the six months to December in February.

Lendlease also highlighted that pre-sales at its One Sydney Harbour project at Barangaroo in Sydney totalled $1.5 billion.

The developer is now targeting an institutional player to invest into the revenue stream through its PLLACeS securities.

Lendleases's bumper equity raise now adds to a whopping $15 billion of equity raised this year as companies across the country react in order to stabilise their balance sheets.

The country’s largest listed residential developer Stockland secured $350 million in unsecured bank facilities lifting its available liquidity to $1.3 billion.

Charter Hall Retail REIT is also tapping the market for $275 million to shore up its balance sheet amid the coronavirus-related retail hit.