SOILBUILD Business Space Reit is raising up to S$59.4 million via a preferential offering to partly fund the acquisition of Bukit Batok Connection.
The Reit is issuing up to 94.35 million new units at S$0.63 per unit through a pro-rata non-renounceable preferential offering to its existing unitholders. At S$0.63, this is a discount of 8.2 per cent to the volume-weighted average price of S$0.6865 per unit for trades done on Aug 18. The preferential offering is made on the basis of one new unit for every 10 existing units held by Soilbuild's entitled unitholders.
The Reit will raise net proceeds of up to approximately S$59.2 million.
Soilbuild group co-founder Lim Chap Huat has committed to take up his pro-rata entitlement and to undertake to apply for excess units if they are unsubscribed, which would take his stake (and that held by his immediate family) in the Reit up to 29.3 per cent. His current stake is 25.16 per cent.
The net proceeds will be used to partially finance the proposed acquisition of Bukit Batok Connection, for which the acquisition cost amounts to S$96.3 million. Including acquisition-related expenses, the total acquisition cost is expected to be about S$100.5 million. It will tap additional means of financing, including unsecured debt borrowings, to fully finance the proposed acquisition.
Roy Teo, chief of the Reit's manager, said: "The preferential offering on the back of Soilbuild Reit's acquisition of Bukit Batok Connection will strengthen Soilbuild Reit's balance sheet and enhance its financial flexibility. The enhanced financial flexibility will also create a stronger platform for further acquisition growth for Soilbuild Reit."