ESR-Logos Real Estate Investment Trust’s : J91U 0% (Reit) manager has proposed a S$300 million equity fundraising exercise to fund future acquisitions, redevelopments and asset enhancement initiatives (AEIs).

This will be accomplished through a private placement and preferential offering, which will raise S$150 million each, the Reit’s manager said on Thursday (Feb 16).

It plans to issue between 447.8 million and 454.5 million new private placement units, at an issue price ranging between S$0.33 and S$0.335.

This represents a discount of between 4.3 per cent and 5.8 per cent to ESR-Logos Reit’s volume-weighted average price (VWAP) of S$0.3502 per unit for all trades done on Feb 15, the day before the placement agreement was signed.

Each new preferential offering unit will be issued at a S$0.005 discount to the private placement price, representing a discount of between 5.8 per cent and 7.2 per cent to the VWAP.

Based on pro forma estimates, had the proposed equity fundraising been completed on Dec 31, 2022, the Reit’s net asset value per share would have decreased to S$0.359 from S$0.364. Its aggregate leverage would also drop to 38 per cent from 41.8 per cent.

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The manager will use around S$293 million in gross proceeds from the fundraising towards future potential acquisitions and finance redevelopment or AEIs of ESR-Logos Reit’s properties. The remaining S$7 million will be used to pay fees and expenses incurred by the Reit in connection with the fundraising exercise.

In connection with the private placement, the manager plans to declare an advanced distribution of between S$0.00426 and S$0.0047, to ensure fairness to holders of existing units. This will apply to the period from Jan 1, up until the day before the private placement units are issued – estimated to be on or around Feb 27.

The manager also said it will issue a circular concerning the preferential offering’s details, and seek unitholder approval for the preferential offering at an extraordinary general meeting to be convened.

Citigroup Global Markets Singapore, DBS and UOB are the joint bookrunners and underwriters for the private placement. RHB Singapore branch has been appointed the sole financial advisor and coordinator for the preferential offering.

ESR-Logos Reit ended flat at S$0.35 on Wednesday. The manager called for a trading halt on Thursday morning before the market opened.