Reit to use proceeds to part finance its acquisition of malls
FRASERS Centrepoint Trust (FCT), a shopping centre real estate investment trust (Reit), yesterday launched a private placement of 137 million new units to part finance its acquisition of Northpoint 2 and Yew Tee Point malls.
The issue price range is $1.29 to $1.33 per new unit, which will generate gross proceeds of $176.7 million to $182.2 million. The actual issue price will be determined after a book-building process.
Of these sums, $173.3 million to $177.8 million will be used to pay for the two malls, which are costing FCT about $295 million in total, inclusive of transaction costs. The rest will be funded by debt.
The issue price range of $1.29 to $1.33 per new unit reflects a discount of 3.7 per cent to 6.6 per cent to the adjusted volume-weighted average price of $1.3805 per unit for trades done on the full market day on Jan 25. Trading in FCT units was halted yesterday.
The manager of FCT has appointed DBS Bank as the sole financial adviser and Citigroup Global Markets Singapore and DBS Bank as the joint lead managers and underwriters of the private placement.
Existing unitholders will receive an advance distribution per unit of about 0.71 cent for the period from Jan 1, 2010 to the day immediately before the date of issue of the new units under the private placement.
The books closure date for the advance distribution will be Feb 3 at 5pm.
FCT has in place a range of loan facilities which it may use to part finance the purchase of Northpoint 2 and Yew Tee Point.
These include a total of $185 million in unutilised bridge loan facilities as well as a total of $1.165 billion that remains untapped under two separate multi-currency medium-term note programmes.
The trust – which currently owns Causeway Point in Woodlands, Northpoint in Yishun and Anchor Point in the Queensway/ Alexandra Road area – will see its gearing increase from about 30.4 per cent as at Jan 1, 2010 to 33.2 per cent after the acquisition of the two malls.
The value of the trust’s deposited property is expected to increase by 25.2 per cent from about $1.167 billion as at Jan 1 to $1.462 billion.
Source: Business Times, 27 Jan 2010