MI-Reit to defer completion of acquisition deal

It gives update on use of rights issue proceeds, announces board changes

MACARTHURCOOK Industrial Reit (MI-Reit), which plans to buy four industrial buildings from its new co-sponsor AMP Capital Holdings, will defer completion of the deal to Jan 11, 2010.

In filings to the Singapore Exchange on Dec 24, the industrial trust also gave an update on the use of proceeds from its recent rights issue and announced a change of name, as well as changes to its board.

In November, the Reit unveiled a combined debt-and-equity-raising plan involving the placement of new shares to new investor AMP as well as existing sponsor AIMS Financial Group and other cornerstone investors, followed by a rights issue and a new term loan. The plan would raise $430 million, part of which would be used to buy four properties from AMP, which would come in as a co-sponsor.

Following the changes, the name of the Reit has been changed to AIMS-AMP Capital Industrial Reit from Dec 24. The names of the Reit’s manager and property manager have also been changed.

AIMS-AMP Capital Industrial Reit has also appointed two new non-independent, non-executive directors and announced three resignations from its board – an executive director, a non-independent, non-executive director and a non-independent, non-executive deputy chairman.

The Reit has completed its rights issue and has issued 975.6 million new rights units, bringing the number of units in issue to 1.46 billion.

In an update on the use of the proceeds from the rights issue, AIMS-AMP Capital Industrial Reit said $82.5 million of the gross proceeds of $155.1 million raised from the rights issue has been used so far. Of the $82.5 million, $39.9 million was to repay a bridging loan from Standard Chartered Bank, and $27.3 million was used to repay part of a $202.3 million term loan.

As for the planned acquisition of the four properties from AMP for a total of $68.6 million, the Reit said the conditions precedent under put and call option agreements relating to the properties were only met on Dec 24, so completion of the acquisition has been deferred. The Reit’s manager has, however, exercised all of the put and call option agreements.

AIMS-AMP Capital Industrial Reit also said the lease with the current master tenant of 23 Tai Seng Drive – one of four properties the Reit has agreed to buy – has been terminated as part of the conditions needed for the sale to proceed.

Source: Business Times, 28 Dec 2009