Does 138 Student Living still plan to pay out dividends even though its APO was undersubscribed?

The 138 Student Living additional public offer closed a few weeks ago.  The numbers are in and well…it’s not what the company was hoping for, despite expanding the offer by a couple weeks.

CEO Cranston Ewan told KRM that the APO received 152 applications and raised a total of $510 million. 

That’s just a quarter of the $2 BILLION that the company wanted to raise. 138 wanted the money to help pay down some of its debts and fund expansion.

According to the APO prospectus, the company’s debts are around four point two billion dollars.  The company operates just over 1,400 rooms at four locations on The UWI, Mona Campus. 

When we spoke to the 138 team on Taking Stock, they mentioned wanting to expand the number of rooms at UWI and possibly branching out to other Universities.

However, given the lacklustre response to the APO, Ewan said that the company is going to focus on paying down its debts, and will shelve the expansion plans for now.

But one of the BIG questions on everyone’s mind is what’s gonna happen with the dividends! 138 listed back in 2014 but just paid out their first dividend in February of this year.

But now that the company has less money to pay down debt, does it still plan to continue with dividends? 

And the answer is… yes! 

Ewan told KRM that paying out dividends is still one of their top priorities, but didn’t indicate the frequency… and that’s the bottom line.