Api swallowed to repay debt
The problems besetting ABC Learning Centres have caused more market upheaval, with the Api Fund and the Australian Social Infrastructure Fund (ASIF) today announcing plans for a merger.
Api has been devalued over the past few months and has a significant stake in child care centres across Australia and New Zealand.
In a joint statement to the Australian Securities Exchange (ASX) and Australia Pacific Exchange (APX), the responsible entity for both funds, Austock Funds Management Limited (AFML), said: “It is in the long-term interests of unit holders in both funds to merge.”
At the same time, Api released a statement explaining that it had entered into two arrangements that will result in a decrease in its debt.
The recent decline and volatility in equity, listed property and infrastructure markets has resulted in a decrease in Api’s portfolio of 24.9 per cent between December 1 and March 31.
Api has sold securities from its portfolio and conducted a rights issue that raised $13.9 million. It was required to raise the money by its banker, National Australia Bank (NAB), because of a 12 per cent decline in the value of its portfolio since mid-February.
The fund had initially undertaken the rights issue, which was offered to three of Api’s major shareholders, including ASIF, in order to raise enough funds to avoid selling securities in the current market climate.
However, the response to the rights issue was poor.
Api owns nearly 15 million units of the AEU, an ASX-listed property trust that in December last year owned 421 childcare centres across Australia and New Zealand.
Approximately 96 per cent of their facilities are leased to ABC Learning Centres.
AFML believes that merging Api and ASIF will benefit both funds by broadening their asset bases and increasing their access to gearing.
Recommended for you
With an advice M&A deal taking around six months to enact, two experts have shared their tips on how buyers and sellers can avoid “deal fatigue” and prevent potential deals from collapsing.
Several financial advisers have been shortlisted in the ninth annual Women in Finance Awards 2025, to be held on 14 November.
Digital advice tools are on the rise, but licensees will need to ensure they still meet adviser obligations or potentially risk a class action if clients lose money from a rogue algorithm.
Shaw and Partners has merged with Sydney wealth manager Kennedy Partners Wealth, while Ord Minnett has hired a private wealth adviser from Morgan Stanley.
