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AA Reit launches private placement to raise at least S$50m in gross proceeds

AIMS AMP Capital Industrial Reit (AA Reit) has launched a private placement exercise to raise gross proceeds of at least S$50 million.

The placement will see AA Reit issue between 37.175 million and 38.314 million new units at an issue price of between S$1.305 and S$1.345 per per unit, its real estate investment trust (Reit) manager AIMS AMP Capital Industrial Reit Management said on Tuesday night.

The Reit manager has appointed Maybank Kim Eng Securities as the sole bookrunner and underwriter for the private placement.

The proceeds will mainly be used to partially repay AA Reit's existing borrowings to create additional debt headroom for future potential acquisitions, asset enhancement initiatives (AEIs) and/or other development opportunities as well as for AEIs and balance payments of AA Reit's recent development projects.

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Existing unitholders will be entitled to the estimated advanced distribution of 1.91 Singapore cents per unit to ensure that the distributable income accrued by AA Reit before the issue of the new units is fairly distributed.

"The equity fund raising exercise is reflective of AA Reit's ongoing efforts to deliver on its strategy and maintain a strong and prudent capital structure," said Koh Wee Lih, CEO of the Reit manager. The previous successful equity fund raising exercise by AA Reit was in fiscal 2014.

The proposed issue price range of S$1.305 to S$1.345 per unit represents a discount of between 4.1 per cent and 6.9 per cent to the volume weighted average price of S$1.402 per unit for trades done on Tuesday. The new units are expected to be issued and commence trading on the Singapore Exchange on Dec 1.