MCT proposing placements to raise at least S$902.3m to fund acquisition

Singapore

MAPLETREE Commercial Trust (MCT) has proposed an equity fundraising to raise at least S$902.3 million to partially fund its S$1.55 billion acquisition of Mapletree Business City (Phase 2), its manager said on Wednesday.

The Reit (real estate investment trust) manager also announced that it had obtained unitholders' approval at an extraordinary general meeting on Tuesday for the proposed acquisition, which would enlarge MCT's asset size from S$7.4 billion to S$8.9 billion.

For the three months ended Sept 30, the commercial landlord posted a distribution per unit (DPU) of 2.32 Singapore cents, up from 2.27 cents a year ago. The trust, which released its financial results on Tuesday, noted that better portfolio contribution boosted its second-quarter performance.

The equity fundraising includes a private placement of 200.9 million new units at an issue price of between S$2.24 and S$2.28 per unit to raise gross proceeds of at least S$450 million, as well as a non-renounceable preferential offering of about 205.6 million units on the basis of 71 new units for every 1,000 existing units in MCT, held as at Oct 24.

MCT requested a trading halt on Wednesday morning following this announcement. Its units closed at S$2.34 each, down 0.4 per cent or one cent on Tuesday.

The private placement issue price range represents a discount of between 4.6 per cent and 2.9 per cent to the S$2.3484 volume-weighted average price (VWAP) of MCT units for all trades done on Oct 15, while the preferential offering issue price range represents a discount of between 6.3 per cent and 4.6 per cent to the VWAP.

The manager intends to use the bulk of the gross proceeds amounting to about S$884.9 million to partially fund the acquisition, with another S$17.4 million for other expenses.

The balance of the total acquisition cost will be funded via the drawdown of new loan facilities, and/or existing loan facilities, MCT said.

The placement units are expected to be listed on the Singapore Exchange on Oct 25.

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.

Citigroup Global Markets Singapore, DBS Bank and UBS AG, Singapore have been appointed as the joint global coordinators and bookrunners for the equity fundraising.