Warehouse landlord Cache Logistics Trust has raised gross proceeds of $100 million from a private placement of units to fund potential acquisitions in Australia and repay debt, the trust manager said yesterday.
Cache is placing 106.27 million new units at an issue price of 94.1 cents each, at the lower end of its indicative price range of 94.1 cents to 96 cents announced on Tuesday.
The issue price is also at a discount of about 5 per cent to its adjusted volume-weighted average price of 99.03 cents per unit for trades on the Singapore Exchange on Monday and up to the time the placement agreement was signed on Tuesday.
The new units are expected to be listed on Nov 13.
The private placement will increase Cache's number of units outstanding by 13.5 per cent.
Cache said this would improve the trading liquidity of its units and help the trust maintain a prudent aggregate leverage ratio.
OCBC Investment Research has maintained a "hold" call on Cache, citing the dilutive impact of the rights issue on the unit price in a note yesterday.
"Our DPU (distribution per unit) forecast for 2016 would be cut by 9.7 per cent if we input a larger unit base and lower finance costs but without factoring in any potential acquisitions," said OCBC analyst Andy Wong.
"Consequently, our fair value would be reduced from $1 to 91 cents from the dilution."
The trust manager also plans to declare an advanced distribution of about 86 cents per unit to Cache's existing unitholders for the period from Oct 1 to Nov 12. The new units will not be entitled to the advanced distribution.
Mr Daniel Cerf, chief executive of the trust manager, said: "In view of recent refinements in the regulatory regime governing real estate investment trusts (Reits) and Reit managers, the manager is taking this opportunity to not only provide for potential acquisitions in the pipeline but to also pare down debt to maintain an appropriate capital structure and provide headroom for future acquisitions and expansion plans."
Last month, Cache bought a warehouse in Queensland, Australia, for A$29.5 million (S$29.6 million).