Frasers Centrepoint Trust's preferential offering priced at S$2.34

Singapore

FRASERS Centrepoint Trust (FCT) has priced its upcoming preferential offering at the bottom end of the range, at S$2.34 per new unit.

This issue price is at a 7 per cent discount to the volume-weighted average price (VWAP) of S$2.5171 based on all trades in FCT units on Sept 25 up to the time the underwriting agreement was signed on Sept 28.

For illustrative purposes, it is also at a 5.3 per cent discount to the adjusted VWAP, which subtracts an aggregate distribution of about 4.485 Singapore cents per unit.

The indicative price range for the preferential offering had been S$2.34 to S$2.42 per unit.

On Tuesday, the real estate investment trust's (Reit) manager said the offering is expected to raise about S$759.7 million if fully subscribed.

About 324.6 million new units will be issued, based on 290 preferential offering units for every 1,000 existing units held as at 5pm on Oct 6.

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

In addition, some 244.7 million new units will be issued under the private placement - the other component of FCT's equity fundraising.

The private placement on Tuesday closed about 2.8 times subscribed and was likewise priced at the low end of the range, with the upsize option not exercised.

It raised gross proceeds of S$575 million at S$2.35 per new unit.

The issue price represents a 6.6 per cent discount to the VWAP of S$2.5171 and, for illustrative purposes, a 4.9 per cent discount to the adjusted VWAP.

The indicative price range for the private placement had stood at S$2.35 to S$2.435 per new unit.

There was also an upsize option to issue additional units, which would have increased the placement's total gross proceeds to around S$675 million if it had been exercised.

The placement "drew strong demand from new and existing institutional and other accredited investors", said the manager on Tuesday.

In connection with the private placement, the manager plans to declare - in respect of the existing FCT units - a cumulative distribution for the period from April 1, 2020 to the date immediately before the new units are issued under the placement. The private placement units are expected to be issued around Oct 7.

Also, the manager will declare a distribution of the Reit's distributable income that was earlier retained for the periods from Oct 1, 2019 to Dec 31, 2019 and from Jan 1, 2020 to March 31, 2020.

The aggregate distribution is thus estimated to be 4.485 Singapore cents per existing unit. This is made up of the cumulative distribution of about 2.804 cents and the retained distribution of about 1.681 cents.

Assuming the preferential offering is fully subscribed, the equity

fundraising's gross proceeds will total about S$1.33 billion.

This will comprise more than 45 per cent of FCT's present market capitalisation, said Richard Ng, chief executive officer of the Reit manager.

About 76.3 per cent or S$1.02 billion of the gross proceeds will finance FCT's acquisition of the remaining 63.11 per cent stake in AsiaRetail Fund from the Reit's sponsor Frasers Property.

Meanwhile, some 21.3 per cent or S$284.9 million will go into paring down existing debts.

FCT units fell S$0.15 or 6 per cent to finish Tuesday at S$2.37 on a cum-dividend basis, after the announcement. About 23.6 million units changed hands, making the Reit the third most actively traded by value on the Singapore bourse for the day.