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Australian Unity makes $105m capital raise
Ashurst has advised Acacia Partners, NAB and Morgans on Australian Unity’s $105 million capital raising.
Tony Zhang
Firm: Ashurst (Acacia Partners, NAB and Morgans).
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Value: $105 million.
Deal: Global law firm Ashurst is advising Acacia Partners Pty Limited, National Australia Bank Limited and Morgans Financial Limited as arrangers and joint lead managers of an initial public offer of mutual capital instruments by Australian Unity Limited to raise $105 million.
Area: Capital markets.
Key players: The Ashurst team led by partner Sarah Dulhunty comprised partner Caroline Smart, assisted by lawyers David Tilley and Joe Ablitt.
Deal significance: Australian Unity, which offers investments, insurance, retirement living, personal finance and healthcare services throughout Australia, launched the initial public offer of mutual capital instruments on 27 November 2020.
“We are delighted to have been able to assist our clients with the inaugural issue of mutual capital instruments in Australia,” Ms Dulhunty commented on the transaction.
Each mutual capital instrument will be offered at an issue price of $100 per security and will be perpetual and fully paid shares of Australian Unity. The dividend rate on the mutual capital instruments is a fixed rate of 5 per cent per annum which was determined through a bookbuild process.
The dividend rate grossed up for franking is 7.14 per cent per annum. Dividends will be discretionary and non-cumulative and are scheduled to be paid semi-annually in arrears in April and October of each year. The offer forms part of Australian Unity’s ongoing capital management strategy, with the proceeds to be used for a range of opportunities across the Australian Unity Group.
The issue of mutual capital instruments by Australian Unity signifies the first time that these financial instruments will be issued in Australia. Mutual capital instruments are financial instruments that have been created exclusively for mutual entities. They enable certain mutual entities, including Australian Unity, to access permanent capital without compromising their status as a mutual entity and to decrease their sole reliance on retained profits as a source of new capital.
The opportunity to issue mutual capital instruments was created by the Treasury Laws Amendment (Mutual Reforms) Act 2019 which came into effect in April 2019 with the intention of improving growth, innovation and competition in sectors where mutual entities operate.
