MLT's private placement priced at S$1.88 per unit; preferential offering at S$1.84 per unit

MAPLETREE Logistics Trust (MLT) M44U : M44U 0%on Wednesday (Nov 24) priced its private placement and preferential offering at S$1.88 and S$1.84 per unit, respectively.

Total gross proceeds of the fundraising exercise will be some S$692.8 million, comprising S$400 million from the private placement and S$292.8 million from the preferential offering.

The trust on Nov 23 said it is acquiring a portfolio of 17 grade-A logistics assets with an average age of 1.6 years in China, Vietnam and Japan for a combined total value of S$1.4 billion.

Some 97.5 per cent or S$675.5 million of the gross proceeds will be used to fund these acquisitions, while 2.5 per cent or S$17.3 million will be used to pay for fees and expenses in connection with the acquisitions and equity fundraising.

Some 212.8 million new units will be issued under the private placement while 159.1 million new units will be issued under the preferential offering.

In connection with the private placement, the manager intends to declare an advanced distribution for the period from Oct 1 to Dec 2. The distribution per existing unit is currently estimated to be between S$0.0145 to S$0.0147. A further announcement on the actual quantum will be made in due course, the manager noted.

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The private placement issue price of S$1.88 per new unit came in at the lower end of the price range. It represents a discount of 2.8 per cent to the adjusted volume-weighted average price (VWAP) of S$1.9339 per unit, for trades done on the preceding market day on Nov 22 up to the time the underwriting agreement was entered, minus the estimated advanced distribution of S$0.0146 per unit.

It is also a 3.5 per cent discount to the VWAP of S$1.9485 per unit for all trades done on the Singapore Exchange Nov 22.

According to the trust manager, the placement was oversubscribed and saw good participation from new and existing institutional, accredited and other investors.

The preferential offering issue price of S$1.84 per new unit was around the mid-point of the indicated price range. It represents a discount of 4.9 per cent to the adjusted VWAP of S$1.9339 per unit and 5.6 per cent to the VWAP of S$1.9485 per unit.

DBS, HSBC Singapore and OCBC are the joint global coordinators and bookrunners for the fundraising.

MLT resumes trading today after it called for a trading halt on Tuesday (Nov 23) morning. The counter last traded 0.5 per cent or S$0.01 lower at S$1.95 on Nov 22.

In a research report on Tuesday (Nov 23), Maybank Kim Eng maintained its "buy" call with an unchanged target price of S$2.35 for MLT following the latest acquisitions.

The brokerage said the 17 new assets which are set to boost the trust's assets under management by 13.5 per cent to S$12.2 billion are backed by strong fundamentals, with upside to rents and valuations in the medium term, underpinned by tight supply. 

For the 13 assets in China and 3 assets in Vietnam, the analysts noted that the net property income (NPI) yield valuation of 5.1 per cent is "undemanding" with 12-month rental support embedded in it. Occupancies in the assets are also expected to ramp up to between 95 and 100 per cent, up from the current 91 per cent. This should help cushion distribution per unit (DPU), they said. 

The analysts also noted that the latest MLT asset in Japan is the largest logistics facility in Japan by net lettable area and has a 4 per cent stabilised NPI yield. 

Although MLT is eyeing accretions of 2.2 per cent in DPU and 4.4 per cent in net asset value for the transactions following the latest fundraising, the analysts expect the DPU accretion to only be at 1 per cent given the S$1.82 to S$1.91 pricing range, as compared to an illustrative S$1.92 unit value. Gearing is also expected to stay at 39 per cent with an estimated S$1.9 billion in debt headroom. 

"Management sees a strong deal flow to Q4 2022 from third-party assets, as it awaits regulatory approval for its proposed S$250 million fourth redevelopment project in Singapore," Maybank Kim Eng added. 

Read more: 

• Mapletree Logistics Trust to acquire logistics assets worth S$1.4b in China, Vietnam and Japan
• Mapletree Logistics Trust prices S$400m perps at 3.725%; redeems 4.18% perps
• Mapletree Logistics Trust posts Q2 DPU up 5.7% to S$0.02173; manager eyes 'substantial' acquisitions