VIVA Industrial Trust is issuing new stapled securities to raise up to S$65 million to finance the asset enhancement works at Technopark@Chai Chee (TPCC).
The trust will be undertaking a private placement with Maybank Kim Eng Securities and OCBC to issue up to 50.96 million new stapled securities at a price of S$0.785 apiece, translating to gross proceeds of about S$40 million. The price represents a discount of 5.2 per cent to the trust's volume-weighted average price of S$0.828 on June 3.
If the private placement is oversubscribed, the trust's managers could increase the size and issue up to 31.85 million more securities to raise a further S$25 million.
The trust's managers plan to use about S$63 million to finance the asset enhancement initiative (AEI) at TPCC, while another S$2 million will go towards paying the fees and expenses in relation to the placement.
The AEI will enable TPCC to continue to attract creditworthy tenants, and allow the trust managers to negotiate better rental rates, Viva Industrial Trust said in its announcement.
Assuming that the upsize option is fully exercised, the trust's total leverage will be reduced from 43.4 per cent to about 40.6 per cent after the private placement. It will also increase the free float of Viva Industrial Trust from 17.4 per cent to 27 per cent, enhancing its trading liquidity and raising the trust's profile among investors, the trust managers said.
Viva Industrial Trust managers on Thursday lodged the offer information statement for the placement with the Monetary Authority of Singapore. The placement is not underwritten by Maybank Kim Eng and OCBC.