CICT closes private placement at $2.04 apiece

SINGAPORE - CapitaLand Integrated Commercial Trust (CICT) closed its private placement at $2.04 per new unit, said its manager on Sept 4.

The private placement was 3.7 times subscribed with “strong demand” from new and existing institutional, accredited and other investors.

The manager announced plans to launch an equity funding exercise on Sept 3, consisting of a private placement and pro rata non-renounceable preferential offering, to raise gross proceeds of at least $1.1 billion.

The proceeds will be used to fund a proposed acquisition of a 50 per cent interest in Ion Orchard and its connecting underpass, Ion Orchard Link, from its sponsor CapitaLand Investment.

A total of 171.7 million new units will be issued under the placement to raise total gross proceeds of about $350.3 million.

The issue price represents about 4.4 per cent to the volume-weighted average price (VWAP) of $2.1338 per unit for all trades done on Sept 2, and up to the time the underwriting agreement was signed on Sept 3.

For illustrative purposes, the issue price represents a discount of about 3.4 per cent to the adjusted VWAP of $2.1122 per unit, after subtracting an estimated advanced distribution.

The manager intends to declare an advanced distribution of between 2.11 cents and 2.21 cents per unit in connection with the private placement.

This will be for the period from July 1 to the day immediately prior to the date on which the new units are issued.

A further announcement on the actual quantum of distribution per unit will be made available, said the manager.

The new private placement units are expected to be issued on Sept 12.

Apart from the private placement, a total of 377.3 million preferential offering units will be offered at a price of $2.007 apiece. This will raise about $757.2 million.

The issue price represents a discount of about 5.9 per cent to the VWAP of $2.1338 per unit. It represents an approximate 5 per cent discount to the adjusted VWAP of $2.1122 per unit, for illustrative purposes.

The manager intends to use around $1.08 billion, or 97.8 per cent of the total gross proceeds, to finance the proposed acquisition.

Some $5 million will be used to repay and refinance debt and/or capital expenditure, as well as asset enhancement initiatives.

About $19.9 million will go towards the payment of estimated fees and expenses, including professional fees and expenses incurred by the trust in connection with the equity fundraising. Units of CICT ended Sept 2 up one cent or 0.5 per cent to $2.13, before the trust requested a trading halt on the morning of Sept 3. The units ended 3.3 per cent or 7 cents lower at $2.06 on Sept 4.

THE BUSINESS TIMES