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Dasin Retail Trust placement 1.2 times subscribed; China malls' purchase price unchanged

DASIN Retail Trust's placement was about 1.2 times subscribed at an issue price of S$0.78 per unit - the lower end of its indicative price range of S$0.78 to S$0.80 per new unit.

The exercise closed on Friday. A total of 120.5 million new units will be issued, to raise some S$94 million in gross proceeds. The placement was "well supported by new investors and existing unitholders", its trustee-manager said in a bourse filing late on Friday night.

The issue price represents a 6 per cent discount to the volume-weighted average price of S$0.83 per unit for trades done on June 25, the date before the placement agreement was signed. Under the agreement, controlling unitholder Aqua Wealth Holdings may subscribe for up to 44 million new units; it subscribed for about 38.5 million units as at the close of the placement.

The exercise is subject to certain conditions, including the receipt of in-principle approval from the Singapore Exchange for the listing of the new units on the bourse. The new units are expected to commence trading at 9am on July 7.

Separately, in response to questions from unitholders ahead of its annual general meeting (AGM), the trustee-manager on Monday said it has been monitoring the development of the Covid-19 situation in China and will continue to maintain strict precautionary measures.

It is also continually adjusting the trade and brand mix at its malls. Traditional trades with relatively weaker operating capabilities such as traditional home furnishing will be gradually phased out, while brands with strong customer attraction such as Haidilao Hot Pot are gradually being introduced, the trustee-manager said.

Overall, the trustee-manager remains "cautiously optimistic" on the retail demand when the situation normalises and expects "greater interest in experiential activities" when the lockdown is lifted.

In addition, the trustee-manager is of the view that the Covid-19 outbreak has "no significant impact on the proposed acquisition" of Shunde Metro Mall in Foshan city and the Tanbei Metro Mall in Zhongshan city and that a revision to the proposed acquisition price is not required.

The agreed property value of S$364.3 million for Shunde Metro Mall represents a discount of 25.1 per cent and 25.3 per cent respectively based on two independent valuations, while the agreed property value of S$10.7 million for Tanbei Metro Mall represents a 23.8 per cent and 26.5 per cent discount respectively based on those valuations. According to the valuers, the impact of the pandemic on a property's operating cash flow is expected to be short term. "Thus, the impact on the long-term property value is limited," its trustee-manager said.

It added that in view of the legally binding agreement approved at the trust's extraordinary general meeting last December, no variation provision is allowed unless agreed by the parties involved. "The discount of more than 20 per cent based on the independent valuations reflects the support and commitment of the sponsor towards the trust, as well as the consideration of possible market volatility that may occur during the period between the signing date and the completion date," the trustee-manager said.

The proposed acquisition is expected to be completed in July this year.

Dasin Retail Trust will be holding its AGM via electronic means at 10am on Monday. The trust requested in the morning to lift a trading halt that was called on Friday. Its units last traded at S$0.83 on Thursday.

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