Aims Apac Reit’s private placement closes at S$1.214 apiece

AIMS Apac Reit : O5RU 0% (AA Reit) has closed its private placement at S$1.214 per new unit, said its manager on Thursday (Jun 1).

The private placement closed at the low end of the estimated price range of between S$1.214 and S$1.249. The manager announced plans to launch an equity funding exercise on Wednesday, to raise around S$100 million.

A total of around 57.7 million new units will be issued under the placement to raise total gross proceeds of about S$70 million.

For illustrative purposes, the issue price represents a discount of about 6.7 per cent to the adjusted volume-weighted average price (VWAP) of S$1.301 per unit, after subtracting the estimated advanced distribution of S$0.018 per unit.

It comes at a discount of about 8 per cent to the VWAP of S$1.319 for all trades done on Tuesday, and up to the time the underwriting agreement was signed on Wednesday.

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. This will be for the period from Apr 1 to the day immediately prior to the date on which the new units are issued.

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A further announcement on the actual quantum of distribution per unit will be made, said the manager.

The new private placement units are expected to be issued on or around Jun 12.

Apart from the private placement, a total of around 25.4 million preferential offering units will be offered at a price of S$1.189 apiece, the low end of the estimated price range. This will raise about S$30 million.

The issue price represents a discount of about 9.9 per cent to the VWAP of S$1.319 per unit for all trades done on Tuesday.

It represents an approximate 8.6 per cent discount to the adjusted VWAP of S$1.301 per unit after subtracting an advanced distribution of S$0.018 per unit, for illustrative purposes.

The manager intends to use around S$32 million to fund the asset enhancement initiatives (AEIs) for two of its Singapore properties.

Some 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 real estate investment trust’s (Reit) existing debt to keep its aggregate leverage within the desired range.

About 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 record date for the entitlement to the advanced distribution and eligibility to participate in the preferential offering is Jun 9 at 5 pm.

AA Reit resumed trading on Thursday and units were trading down 6.9 per cent or S$0.09 at S$1.22 as at 10.24 am.