MLT preferential offering's issue price set at S$1.99; placement oversubscribed

BOTH components of Mapletree Logistics Trust's (MLT) equity fundraising to finance its Asia acquisition spree have been priced at the top ends of their indicative ranges, with the upsized placement oversubscribed.

MLT's manager on Wednesday said the private placement was about 5.5 times covered, with the issue price fixed at S$2.027 per new unit. The upsize option was exercised in full.

The placement saw strong participation from new and existing institutional, accredited and other investors, said the manager.

The issue price represents a discount of about 2.5 per cent to the volume-weighted average price (VWAP) of S$2.0781 per unit for all trades in MLT units done on Monday up to the time the underwriting agreement was signed. It also represents a 1.2 per cent discount to the adjusted VWAP of S$2.0513 per unit.

Meanwhile, the issue price for the non-renounceable preferential offering has also been set at the top end of the price range, at S$1.99 per new unit.

This is at a 4.2 per cent discount to the VWAP and a 3 per cent discount to the adjusted VWAP.

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The preferential offering will be done on the basis of 19 new units for every 1,000 existing units held by eligible holders as at 5pm on Oct 28.

MLT will issue about 246.7 million new units under the private placement and some 72.4 million new units under the preferential offering.

In connection with the private placement, the manager intends to declare an advanced distribution in respect of existing units for the period Oct 1 to the date prior to the issue of new placement units. This will be together with the second quarter FY20/21 distribution of 2.055 Singapore cents per unit announced on Monday.

The quantum of the cumulative distribution is estimated to be between 2.669 Singapore cents to 2.687 Singapore cents per unit. The manager said it will make an announcement on the actual quantum in due course.

The new units from the placement are expected to be issued on or around Oct 29.

The manager intends to use around S$626.6 million of the gross proceeds of about S$644.1 million to partially fund MLT's proposed S$1.09 billion acquisition of properties across the region.

MLT is looking to buy nine logistics properties in China, Malaysia and Vietnam, and also the remaining half stake in 15 properties in China, its manager had announced on Monday. MLT will purchase these assets from subsidiaries of its sponsor Mapletree Investments and subsidiaries of Itochu Corporation.

The proposed acquisitions are subject to unitholder approval at an extraordinary general meeting. If MLT does not proceed with the proposed acquisitions, proceeds from the equity fundraising will be redeployed to fund future investments and/or pare debt.

Citigroup Global Markets Singapore, DBS, HSBC Singapore branch and OCBC are the joint global coordinators and bookrunners for the equity fundraising.

MLT on Wednesday morning requested to lift the trading halt it called on Tuesday. The counter was trading flat at S$2.08 as at 10.02am on Wednesday.