Aims Apac Reit to launch equity funding exercise to raise around S$100 million

THE manager of Aims Apac Real Estate Investment Trust (AA Reit) plans to launch an equity funding exercise to raise gross proceeds of approximately S$100 million, it announced on Wednesday (May 31).

This comprises a private placement of between 56 million and 57.7 million new units to raise around S$70 million in gross proceeds, and a non-renounceable preferential offering of up to 25.4 million new units to raise gross proceeds of about S$30 million.

The private placement units will be priced between S$1.214 and S$1.249 apiece – at a discount of between 5.3 per cent and 8 per cent to the volume-weighted average price (VWAP) of S$1.319 per unit for trades done on Tuesday.

The manager also intends to declare an advanced distribution of between S$0.017 and S$0.019 per unit in connection with the private placement.

Assuming an advanced distribution of S$0.018 per unit is deducted, the private placement issue price range represents a discount of between 4 per cent and 6.7 per cent to an adjusted VWAP of S$1.301 per unit – for illustrative purposes.

Under the preferential offering, new units will be priced between S$1.189 and S$1.224 apiece. This represents a discount of between about 7.2 per cent and 9.9 per cent to the VWAP of S$1.319 per unit for all trades done on Tuesday.

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The preferential offering issue price range represents an approximate 5.9 per cent and 8.6 per cent to the adjusted VWAP of S$1.301 per unit after subtracting an advanced distribution of S$0.018 per unit, for illustrative purposes.

Assuming that gross proceeds of S$100 million are raised from the equity fundraising, the manager intends to use around S$32 million to fund the asset enhancement initiatives (AEIs) for two of its Singapore properties.

Another S$65.2 million will be used to fund its other AEIs, redevelop its properties and for potential acquisitions. It will also be used to pare down the Reit’s existing debt to keep its aggregate leverage within the desired range.

Some S$2.8 million will go towards the payment of estimated professional and other fees and expenses incurred by the Reit in connection with the equity fundraising.

The placement launched on Wednesday and will close on Thursday, while the preferential offering will begin on Jun 14 and close on Jun 22 at 5.30 pm. The record date for the preferential offering and advanced distribution is Jun 9 at 5 pm.

Units of AA Reit : O5RU 0% closed down 1.5 per cent or S$0.02 at S$1.31 on Tuesday before it requested a trading halt on Wednesday prior to the market open.