Find out where CapitaMall Trust Management squeezed its S$250m

It's a hefty sum.

According to a release, CapitaMall Trust Management Limited announced that 125,000,000 new units in CMT (New Units) have been successfully placed through a private placement (Private Placement) at an issue price of S$2.00 per New Unit, raising gross proceeds of S$250 million.

The Private Placement has been oversubscribed and the number of New Units to be issued has been upsized from 100,503,000 New Units to 125,000,000 New Units due to positive market demand.

The proceeds will be primarily used to finance capital expenditure and asset enhancement initiatives of CMT properties, refinancing of existing debts of CMT and its subsidiaries and/or general corporate and working capital.

Assuming that the net proceeds will be used to repay existing debts, the Private Placement is expected to reduce CMT’s aggregate leverage from 37.7% 1 to 35.1% 2 . Consistent with the recent extension of the debt maturity profile, the reduction in aggregate leverage will also optimise CMT’s capital structure and enhance its balance sheet and debt headroom.

The issue price of S$2.00 per New Unit represents a discount of 4.8% to the adjusted volume weighted average price 3 of S$2.1002 per Unit, for trades in the Units done on Singapore Exchange Securities Trading Limited (SGX-ST) on 21 November 2012.

The lead manager and underwriter of the Private Placement is J.P. Morgan (S.E.A.) Limited.

The Private Placement saw strong participation from more than 60 existing and new institutional investors from Asia, the United States and Europe.

Mr Wilson Tan, CEO of CMTML, said, “We are pleased to receive a strong response from existing and new investors and would like to thank all of them for their continued support. This exercise is consistent with the recent refinancing to extend our overall debt maturity profile by putting in place more permanent source of capital. This equity placement also allows us to optimise our capital structure, thereby increasing our debt headroom and putting us into a better position to embark on future opportunities to boost unitholders’ returns.”