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Frasers Centrepoint Trust plans up to S$1.44b equity fundraising

THE manager of Frasers Centrepoint Trust (FCT) is looking to undertake 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 proposed 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 at least about S$1.33 billion, and up to S$1.44 billion, the manager said in a bourse filing on Monday.

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

The private placement's issue price range is at a discount of 3.3 per cent to 6.6 per cent to the volume weighted average price (VWAP) of S$2.5171 per unit for all trades in the counter on Sept 25 up to the time the underwriting agreement was signed on Sept 28.

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The placement will close on Tuesday, and the units are expected to be listed on Oct 7.

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

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

Each eligible FCT unitholder will be provisionally allotted the units under the offering based on holdings in FCT as at 5pm on Oct 6. The provisional allotment of the preferential offering units cannot be renounced in favour of a third party or traded on the Singapore Exchange (SGX).

The preferential offering will then open on Oct 9 at 9am, and close on Oct 19 at 5pm.

The Reit manager and the underwriters will determine the issue price for the private placement after a book-building process. After that, the preferential offering's issue price will be determined.

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

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

In addition, Frasers Property will procure that FPRTH 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 unitholdings in FCT before the placement. This means the sponsor group's percentage unitholdings in the Reit will stay the same after the private placement is completed.

Assuming the equity fundraising rakes in gross proceeds of about S$1.33 billion, the FCT manager plans to use about 76.7 per cent or S$1.02 billion to fund the purchase price for AsiaRetail Fund. The manager will also use some 20.9 per cent or S$277.5 million to pare down existing debt.

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 morning, 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 units in FCT under an equity fundraising.

SGX has given its approval in-principal 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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