Dasin Retail Trust launches private placement to raise up to S$94m

DASIN Retail Trust on Friday launched a private placement to raise gross proceeds of up to S$94 million to partially fund its proposed acquisition of two malls in China's Guangdong province. 

The trust will issue a maximum of 120.5 million new units at an issue price of between S$0.78 and S$0.80 per new unit. The issue price range represents a discount of about 6 per cent and 3.6 per cent respectively to the trust's volume-weighted average price of S$0.83 per unit for trades done on June 25. 

The new units are expected to be issued on or around July 7, its trustee-manager said on Friday morning. 

In November last year, Dasin Retail Trust announced that it is proposing to buy two malls in China from its sponsor Zhongshan Dasin Real Estate and its trustee-manager's chairman, Zhang Zhencheng. The trustee-manager said then that it had entered into a sale and purchase agreement for the proposed acquisitions of Shunde Metro Mall in Foshan city and Tanbei Metro Mall in Zhongshan city, with the total acquisition cost estimated to be S$333 million, subject to post-completion adjustments.

In a bourse filing on Friday, the trustee-manager said it intends to use about S$77.7 million, or 82.7 per cent of the gross proceeds to make partial repayment of an onshore construction loan. Another S$4.8 million, or 5.1 per cent of the gross proceeds will be used for construction payables, while S$11.5 million, or 12.2 per cent, will go towards fees and expenses related to the placement. 

Under the private placement, controlling unitholder Aqua Wealth Holdings may subscribe for up to 44 million new units in Dasin Retail Trust. 

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The trustee-manager believes that the private placement, in combination with debt and equity financing and internal funding, is an "efficient and overall beneficial method" of raising funds to finance the proposed acquisition, as well as to allow for the participation of more potential institutional and accredited investors. It added that the increase in the total number of units in issue and an enlarged unitholder base is expected to enhance trading liquidity.

In connection with the placement, the trustee-manager intends to declare a semi-annual distribution for the period from Jan 1 to June 30, as well as an advanced distribution for the period from July 1 to 6, being the date immediately before the new units are issued. Taken together, the cumulative distribution is estimated to be between two Singapore cents and 2.33 cents. Holders of the new units from the placement will not be entitled to this cumulative distribution, which the trustee-manager said would ensure fairness to existing unitholders. 

The next distribution following the cumulative distribution will comprise Dasin Retail Trust's distributable income for the period from July 7 to Dec 31, 2020. Semi-annual distributions will resume thereafter. 

AMTD Global Markets; Bank of China, Singapore branch; CLSA Singapore; DBS Bank; Haitong International Securities (Singapore); Phillip Securities and Soochow CSSD Capital Markets (Asia) are the joint bookrunners for the placement.

Dasin Retail Trust requested a trading halt on Friday morning, pending this announcement. Its units closed at 83 Singapore cents on Thursday, up 0.5 cent or 0.6 per cent.