Ascendas REIT looks to raise $408.3m in fund raising exercise

The proceeds will partially fund its One@Changi acquisition.

Ascendas REIT (A-REIT) has proposed an equity fund raising exercise that will partially fund its potential acquisition of a business park, according to OCBC.

The exercise will comprise a private placement of 90 million new units, as well as a pro-rata and non-renounceable preferential offering of about 93.9 million new units on the basis of three new units for every 80 existing units.

The issue price stands at $2.223, representing a discount of 6.6% to A-REIT’s last closing price before it stopped trading. The preferential offering’s price was set at 0.5 cents lower than the private placement price.

Overall, the company is expecting to raise gross proceeds of about $408.3m.

A-REIT is also looking to a nab a business park named One@Changi City. It has a 97.1% occupancy as at 30 September 2015, and anchor tenants include Credit Suisse and J.P. Morgan. 

One@Changi City has a total acquisition cost of $438.9m, while the purchase consideration is $420m. About $210m of the purchase consideration would be satisfied by issuance of consideration units (which is priced the same as the private placement issue price) to the vendor, which is a 50:50 joint venture between Ascendas Pte and Frasers Centrepoint. 

The $210m balance is set to be funded by proceeds from Ascendas’ equity funding exercise.

The rest of the exercise’s proceeds would be channeled towards partially funding a potential Australia logistics property acquisition (~$82m) $82m, and funding debt repayment and future acquisitions (~98.8m).