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MCT prices placement at rich end of price talk at S$2.28 on strong demand

MAPLETREE Commercial Trust (MCT) on Thursday said it will raise S$918.5 million from its equity fundraising exercise, with about S$458 million from an overnight placement, and about S$460.5 million from a preferential offering. 

The issue price for the private placement was fixed at S$2.28 per new unit, at the higher end of the S$2.24 to S$2.28 price range announced on Wednesday. According to MCT, the private placement was about seven times covered, and saw strong participation from new and existing investors. 

The issue price under the preferential offering has been priced at S$2.24 per unit, to cover the rich end of initial indications. 

MCT on Wednesday proposed the equity fundraising comprising of 406.5 million new units to raise at least S$902.3 million in a bid to partially fund its S$1.55 billion acquisition of Mapletree Business City (Phase 2).

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The private placement issue price of S$2.28 per new unit represents a 2.9 per cent discount from the S$2.3484 volume weighted average price (VWAP) of MCT units traded on Oct 15, while the preferential offering issue price of S$2.24 represents a 4.6 per cent discount to the VWAP. 

The new units from the private placement are expected to be issued on or around Oct 25, MCT said. 

The preferential offering will open on Oct 30, with entitled unitholders able to accept and apply for preferential offering units up until Nov 7. These units are expected to begin trading on Nov 15.

In addition, MCT's policy is to distribute its income on a quarterly basis to unitholders. Earlier on Tuesday, the manager announced a second-quarter distribution of 2.32 Singapore cents per unit for the period from July 1 to Sept 30, 2019. 

In connection with the private placement, the manager intends to declare an advanced distribution for the period from Oct 1 to the date preceding the day when the new placement units are issued, along with the Q2 FY2019/20 distribution. This cumulative distribution is estimated to be between 2.90 to 2.95 Singapore cents, and will be announced by the manager in due course, it said. 

The manager intends to use the bulk of the gross proceeds amounting to about S$899.9 million to partially fund its acquisition of Mapletree Business City (Phase 2). Another S$18.6 million will be used for other expenses related to the acquisition, the equity fundraising as well as new loan facilities. 

Notwithstanding this, the manager may also utilise the net proceeds from the equity fundraising for other purposes, including the payment of existing debts or to fund capital expenditures, it said. 

In a regulatory filing on Thursday, MCT also noted that DBS Bank's treasury investments unit has been allocated 600,000 new units under the private placement. The sponsor, Mapletree Investments, which is indirectly owned by Temasek Holdings, is a substantial unitholder of MCT. Accordingly, Temasek is a deemed substantial holder of MCT.

Based on the latest annual report of DBS Group Holdings for the financial year ended Dec 31, Temasek also has a direct and deemed interest of 29.9 per cent in DBS Group Holdings as at March 1, 2019. 

Following this announcement on its placements results, MCT requested for a trading halt on Thursday morning before the market open. The counter last traded at S$2.34 on Tuesday, down 0.4 per cent, or one Singapore cent.