【SMH】China pumps cash into Goodman

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China pumps cash into Goodman      
http://business.theage.com.au/business/china-pumps-cash-into-goodman-20090616-ccsy.html

Carolyn Cummins June 16, 2009 - 10:42AM

Global industrial property fund Goodman Group has shored up its longer-term future through a cash and options deal with the China Investment Corp that will see a total commitment in Goodman of about $485 million.

The deal will see CIC inject $200 million into Goodman through a finance facility as part of a broader relationship between the two companies.

As part of the transaction, Macquarie Group and its associates have sold down about $15 million of their exposure in Goodman to CIC. The deal will require approval from Australia's Foreign Investment Review Board.

After much speculation that a deal was being hatched worth more than $1 billion, the cash facility will not be increased in size beyond $485 million.

Investor reaction was muted with Goodman securities falling 3.5 cents to 45.4 cents. In the past week Goodman's price jumped from 30 cents as investors rallied behind Goodman's well-anticipated refinancing package.

In conjunction with the new CIC deal, additional options will be granted over 255.3 million Goodman stapled securities with a two-year term at a strike price of 40 cents and the lenders will share the two tranches of options on a pro rata basis.

Greg Goodman, the chief executive and co-founder of Goodman, said he was pleased with the support shown to the group by CIC and "is excited about the opportunity to partner with an institution of this calibre as we seek to grow our business globally''.

"We view a relationship with CIC as highly strategic and believe that together we can capitalise on the significant opportunities created by current market conditions,'' Mr Goodman said.

"The key terms of the $485 million facility comprise a nine-month term expiring in February 2010, extendable for a further 15 months; and a secured facility with covenants comparable to those in Goodman's existing common terms deed poll.''

Mr Goodman said following the completion of the CIC deal, the Goodman board and management team will be in discussions with all relevant investors to "determine Goodman's optimal long term capital structure''.

"The goal of these initiatives will be to have the group more conservatively leveraged and to achieve a debt structure both within Goodman and across its managed funds that is sustainable and resolves expires over the next two years.''

ccummins@smh.com.au

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