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FCT to price preferential offering at S$2.34 to S$2.42 per unit

Singapore

THE manager of Frasers Centrepoint Trust (FCT) is undertaking a private placement at an issue price of between S$2.35 and S$2.435 per unit, as well as a non-renounceable preferential offering at between S$2.34 and S$2.42 per unit.

The equity fundraising will partially finance the real estate investment trust's (Reit) acquisition of the remaining 63.11 per cent stake in AsiaRetail Fund from its sponsor, Frasers Property, and pare existing debts.

Taken together, the placement and offering will raise between S$1.33 billion and S$1.44 billion.

The private placement to institutional and other investors will involve some 236.1 million to 244.7 million new FCT units, to raise up to S$575 million. Further, there is an upsize option to issue up to 42.6 million additional units, which will increase the placement's total gross proceeds to around S$675 million.

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The placement's price range is at a 3.3-6.6 per cent discount to the volume weighted average price (VWAP) of S$2.5171 for all trades in the counter on Sept 25 up to the time the underwriting agreement was signed on Sept 28. The placement closes on Tuesday, and the units are expected to be listed on Oct 7.

As for the preferential offering, some 313.4 million to 324.6 million new units will be offered to existing unitholders of FCT. This will bring in at least S$746 million in gross proceeds.

The preferential offering's issue price range is at a 3.9-7 per cent discount to the VWAP of S$2.5171.

Each eligible unitholder will be provisionally allotted the units under the offering based on their holdings in FCT as at 5pm on Oct 6. The preferential offering will open on Oct 9 at 9am and close on Oct 19 at 5pm.

DBS, Citigroup Global Markets Singapore and OCBC are the appointed joint lead managers and underwriters for the equity fundraising.

Frasers Property - which owns 36.57 per cent of the Reit via Frasers Property Retail Trust (FPRT) and the manager - has provided an irrevocable undertaking to procure FPRT and the manager to accept and subscribe for their total provisional allotment of the preferential offering units.

In addition, Frasers Property will procure that FPRT and the manager make excess applications for up to 245.1 million additional preferential offering units that are not taken up by other unitholders.

As earlier announced, the private placement may include a proposed issue and placement of new units to the sponsor group. At an extraordinary general meeting (EGM) on Monday, unitholders approved this sponsor placement.

If Frasers Property and its subsidiaries are offered units under the sponsor placement, they will subscribe for these units, but only up to their proportionate pre-placement holdings in FCT. This means the sponsor group's percentage unitholdings in the Reit will stay the same after the private placement is completed.

Assuming the fundraising rakes in gross proceeds of S$1.33 billion - at the low end of the range - the FCT manager plans to use 76.7 per cent or S$1.02 billion to fund the AsiaRetail Fund purchase. It will also use some 20.9 per cent or S$277.5 million to pare down existing debts.

The FCT manager said the AsiaRetail Fund transaction and the equity fundraising - including the sponsor placement - represent "a rare opportunity" for the Reit to increase its number of retail properties to 11 from seven, and to increase its retail net lettable area to 2.3 million square feet, making FCT one of Singapore's largest suburban mall owners.

At the EGM on Monday, unitholders unanimously gave the green light for the AsiaRetail Fund share acquisition at a purchase price of close to S$1.06 billion. They also approved the divestment of Bedok Point mall to a Frasers Property subsidiary for S$108 million, with holders of 99.99 per cent of units voting in favour. Some 99.72 per cent gave their approval for the issue of up to 628 million new FCT units under an equity fundraising.

The Singapore Exchange has given its approval in-principle for the new units, said FCT's manager.

FCT called for a trading halt on Monday before market open. Its units closed at S$2.52 on Friday. Shares of Frasers Property closed flat at S$1.18 on Monday.

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