Digital Core Reit’s private placement closes at  US$0.625, upsizes to raise US$120 million

Digital Core Real Estate Investment Trust (Reit) has issued 192 million new units at an issue price of US$0.625 per unit on Thursday (Feb 8), at the top end of the US$0.60-to-US$0.625 range proposed the day before.

The manager noted that the issue size was enlarged to US$120 million, of which about US$75 million, or 62.5 per cent of the gross proceeds will be used to fund potential acquisitions – a further 4.9 per cent stake acquisition in a Frankfurt facility and a proposed acquisition of an interest in a data centre in Japan.

Some US$42.5 million, or 35.4 per cent of the gross proceeds will be used to repay debt, and about US$2.5 million, or 2.1 per cent raised, will be used to pay relevant fees and expenses.

“With the balance of the gross proceeds of the private placement, if any, to be used for general corporate and working capital purposes,” the manager added.

The issue price of US$0.625 per unit represents a discount of about 5 per cent to the volume weighted average price of US$0.6579 per unit on the market day before the placement agreement was entered.

The new units are expected to be listed on or around Feb 20. Following this, the Reit’s unit base will be enlarged to around 1.32 billion units.

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As a result of the gross proceeds upsize, the pro forma FY2023 distribution per unit (DPU) increased to US$0.0358. The DPU accretion after adjusting for the transactions as announced last November, the proposed acquisitions and the private placement is also up to 2.4 per cent.

The pro forma aggregate leverage as at the end of last December stood at 32.4 per cent, down from 33.8 per cent estimated in the placement proposal, and from 40.5 per cent reported.

Units of Digital Core Reit : DCRU 0% last traded flat on Tuesday at US$0.665 before its trading halt on Wednesday. It requested to lift trading halt on Thursday.