ASCENDAS India Trust (a-iTrust) is launching a private placement of at least 66.3 million units at an issue price of between S$1.465 and S$1.508 to raise gross proceeds of at least S$100 million.

This is to fund its potential investment in a business park in Bangalore, its trustee-manager said in a regulatory filing.

The issue price represents a discount of between 2.9 and 5.7 per cent to the volume-weighted average price of S$1.5538 per unit for all trades done on Nov 18 - the full market day before the placement agreement was signed.

The issue price will be determined by the trustee manager and joint bookrunners and underwriters Citigroup Global Markets Singapore and DBS Bank following a book-building process.

The new units will also be offered to eligible institutional and other accredited investors.

Out of the S$100 million raised, around S$98 million will be used to finance the initial upfront funding of phase one of the project which is 7.5 billion rupees (around S$144 million).

This is through the subscription of non-convertible debentures issued by a third-party vendor - subject to the completion of negotiations.

The remaining some S$2.0 million will be used for estimated fees and expenses to be incurred in connection with the placement.

In connection with the placement, a-iTrust has entered into a non-binding agreement with the vendor for the potential investment by way of forward purchase - which will see it providing project funding in the development phase before the acquisition of relevant phases.

The entire project is estimated to be carried out in several phases over some 10 years, subject to market demand.

The first phase of the Bangalore business park project has an estimated total net leasable area of 1.7 million square feet. This phase is planned for construction and acquisition within four years from the date of first disbursement, subject to certain conditions.

a-iTrust plans to acquire phase one of the project following the completion of construction and final due diligence. This is by paying the vendor a top-up consideration based on the rental, rental escalation and leasing level at the time of the acquisition of the completed phase.

The acquisition price of the project's first phase is not expected to exceed 17.3 billion rupees, depending on conditions at the time of the sale. At the time of acquisition, an independent valuation will also be carried out.

The non-binding agreement will allow a-iTrust the right to call for the redemption of the non-convertible debentures, if certain key conditions are not met; final due diligence upon the phase completion is unsatisfactory; or certain events occur to make the acquisition impractical.

The trustee-manager called for a halt in the trading of a-iTrust units on Tuesday morning prior to the release of the announcement. Before the trade halt, the counter closed on Monday at S$1.54, down two Singapore cents or 1.3 per cent.