Australand to raise A$475 mln equity to cut gearing

SYDNEY, July 27 (Reuters) - Australand Property Group (ALZ.AX) is raising A$475 million ($389 million) in a fully underwritten share issue to strengthen its balance sheet and secure its funding needs for two years, the firm said on Monday.

Australian property firms have been on an equity binge, as banks prove reluctant to extend loans or demand sharply higher interest rates. In the first half of 2009, Australian real estate investment trusts raised more than A$9 billion in equity.

Australand's offer comprises an institutional offer of up to about A$380 million and a retail issue of about A$95 million, with the group's majority securityholder, Singapore's CapitaLand (CATL.SI), committing to take up its full pro-rata entitlement of around A$282 million, Australand said in a statement.

The new shares are being offered at A$0.40 each, with shareholders entitled to buy seven for every 10 held, a 20 percent discount ot the stock's last traded price of A$0.50.

(Reporting by Mette Fraende; Editing by Mark Bendeich) ($1=1222000000 AUSTRALIAN DOLLAR)