MIT to raise $350m through private placement

Most of the proceeds will be used in acquiring 14 data centres in the US.

Mapletree Industrial Trust (MIT) has proposed a private placement of 128.11 million new units to raise gross proceeds of $350m, an SGX filing revealed.

It will be available to eligible institutional, accredited and other investors at an issue price of between $2.732 and $2.8 apiece. The private placement is also subject to an upsize option being exercised to issue up to 18.3 million additional new units to raise additional proceeds of no less than $50m.

Citigroup Global Markets Singapore, DBS Bank and the Hongkong and Shanghai Banking Corporation, Singapore Branch, have been appointed as the joint bookrunners and underwriters.

The issue price range represents a discount of between approximately 5% and 2.6%, respectively, to the volume weighted average price (VWAP) of $2.8745 per unit in MIT of all trades in the units on the SGX-ST, and represents approximately 4% and 1.6%, respectively, to the adjusted VWAP of $2.85 apiece.

The issue price will be determined by the MIT’s manager, joint bookrunners and underwriters following a book-building process.

About $302.6m or 86.5% of the proceeds will be used to fund the proposed acquisition of the remaining 60% interest in 14 data centres across the US, currently held by Mapletree Redwood Data Centre Trust. About $41.8m or 11.9% will be directed to repay MIT’s debt, fund future acquisitions and/or for general corporate and/or working capital purposes, whilst the remaining $5.6m will be for paying the estimated fees and expenses incurred or to be incurred from the private placement.

“Should the gross proceeds of the Private Placement exceed $350m, such excess proceeds will be used towards debt repayment, future acquisitions and/or for general corporate and/or working capital purposes,” MIT added.

In addition, in the event that MIT does not proceed with the proposed acquisition of the data centres, the proceeds from the private placement shall be re-deployed to fund ongoing as well as future investments or to pare down debt.

“Where proceeds are to be used for working capital purposes, the manager will disclose a breakdown with specific details on the use of proceeds for working capital in MIT's announcements on the use of proceeds and in MIT's annual report and where there is any material deviation from the stated use of proceeds, the manager will announce the reasons for such deviation,” the filing said.

The proposed acquisition is expected to be distribution per unit accretive to unitholders on a pro forma basis, based on the proposed funding structure in respect of the financial year ended 31 March.