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Keppel DC Reit raises S$478.2m via private placement, preferential offering

KEPPEL DC Reit has raised S$478.2 million through a private placement of 135 million units at an issue price of S$1.744 per unit, and a preferential offering of about 142 million units at an issue price of S$1.71. 

The private placement announced on Monday, drew strong demand from new and existing investors, which led to the book being approximately 9.3 times subscribed, the manager of Keppel DC Reit said. 

The issue price under the private placement was at the top end of the price range of between S$1.703 and S$1.744, and was at a 2.5 per cent discount to the volume weighted average price (VWAP) of S$1.7882 on the preceding market day on Sept 13, before the underwriting agreement was signed. 

The issue price under the preferential offering has been fixed at S$1.71 per unit, or a 4.4 per cent discount to the VWAP, on the basis of 105 new units for every 1,000 new units. 

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Units in Keppel DC Reit last traded at S$1.80 on a cum dividend basis, up 2.3 per cent, or four Singapore cents on Sept 13. The company requested for the lifting of its trading halt late on Monday night following this announcement. 

The new units under the private placement are expected to be issued on, or around Sept 25, while the new units under the preferential offering are expected to be listed on Oct 15. 

Total gross proceeds from the equity fund raising will amount to S$478.2 million, comprising about S$235.4 million from the private placement, and about S$242.8 million from the preferential offering. 

The manager intends to use S$438.6 million, or 91.7 per cent of the proceeds to partially fund the proposed acquisition of a 99 per cent interest in a data centre, Keppel DC Singapore 4, as well as a 100 per cent stake in 1-Net North Data Centre.

Another S$31 million, or 6.5 per cent of the proceeds will be used to fund capital expenditure, and about S$8.6 million, or 1.8 per cent will be used for estimated fees incurred from the equity fund raising. The balance, if any, will be used for general corporate purposes, the manager said. 

In a regulatory filing on Monday, the manager noted that both acquisitions, which are slated to be completed in the fourth quarter, are expected to be highly accretive to Keppel DC Reit's distribution per unit. When completed, the Reit's assets under management will grow by 30.7 per cent to S$2.58 billion, comprising 17 data centres globally.

DBS Bank, Citigroup Global Markets Singapore, Credit Suisse (Singapore) and CLSA Singapore were the joint underwriters for this round of equity fund raising.