Tuesday, June 29, 2010

CapitaMalls Malaysia Trust launches IPO

CapitaMalls Asia could raise RM864m from spin-off's retail offering

CAPITAMALLS Malaysia Trust (CMMT) launched its retail offering yesterday as part of its listing on Malaysia's main share market.

The real estate investment trust (Reit) has been spun off from CapitaMalls Asia and will contain the parent company's three Malaysian malls.

It is offering 786.5 million units to institutional investors in Malaysia and overseas as well as Malaysian retail investors. The units will not be available to retail investors here.

About 719 million of the units will be offered to institutions, and the indicative price is RM1.10 (47 Singapore cents). There are 67.5 million units earmarked for Malaysian retail investors at a maximum price of RM1.08.

The price levels suggest CapitaMalls Asia could raise as much as RM863.8 million from the initial public offering (IPO).

The retail offering opened at 10am yesterday and will close at 5pm next Monday.

The institutional offering opened last Friday and will close next Wednesday.

CapitaMalls Malaysia Trust is expected to list on July 16.

CapitaMalls Malaysia Reit Management (CMRM) chairman Kee Teck Koon said in a statement that the listing of CapitaMalls Malaysia Trust will provide access to capital markets and accelerate the growth of its shopping mall business in Malaysia.

CMRM is the manager of CapitaMalls Malaysia Trust.

CMRM chief executive Sharon Lim said: 'Going forward, the fragmented ownership of shopping malls in Malaysia presents opportunities for growth through acquisition.'

CapitaMalls Asia will retain a stake of 41.74 per cent in CMMT, but if an over-allotment option of up to 117.98 million units is exercised, its stake could go down to 33 per cent.

The Employees Provident Fund Board of Malaysia and Great Eastern Life Assurance (Malaysia) have signed up as cornerstone investors in the IPO. They will subscribe to an aggregate of 90 million units, or 11.4 per cent of the 786.5 million units being offered in total.

They have agreed to pay RM1.10 per unit or the institutional price, whichever is lower.

Bloomberg said the CMMT offering is set to become Malaysia's second-biggest IPO this year while the Trust says it will become the largest 'pure-play' shopping mall Reit in Malaysia.

AmTrustee, which is the CMMT trustee, values the shopping mall portfolio at RM2.13 billion.

The assets are Gurney Plaza in Penang, The Mines in Selangor, as well as an interest in Sungei Wang Plaza in Kuala Lumpur. The portfolio has a total net lettable area of approximately 1.88 million sq ft.

At the indicative price of RM1.08, the retail offer will provide a forecast distribution yield of 6.9 per cent for 2011, said CMMT.

CMMT's market capitalisation is expected to be about RM1.4 billion, it added.

The CMMT statement said that CapitaMalls Asia plans to have a Malaysia retail property fund to acquire and develop property, especially malls in the country.

CapitaMalls Asia lost two cents to $2.14 yesterday.

Source: Straits Times, 29 Jun 2010

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