SINGAPORE - The Warburg Pincus-backed ESR-Reit on Monday (Jan 29) said that it has proposed a merger of all the stapled securities of Viva Industrial Trust (VIT) and the units of ESR-Reit through a trust scheme of arrangement.
This will be effected by ESR-Reit acquiring all of VIT stapled securities; in return, ESR-Reit will issue new ESR-Reit units to the stapled security holders.
"The proposed merger is part of ESR-Reit's strategy to create a diversified, sizeable and liquid Pan-Asia developer-backed Singapore-based industrial property Reit with greater financial strength, larger market capitalisation and higher liquidity, which is able to leverage on its sponsor's network and visible pipeline of regional assets," it said.
It added that it wanted to create a sizeable and liquid industrial Reit (real estate investment trust) that is well supported by a developer-sponsor financially.
"Such a Reit will have cost of capital and stable growth advantages for the benefit of all unitholders," it said.
Should the proposed merger be completed, the enlarged ESR-Reit is expected to become the fourth-largest industrial S-Reit in terms of overall asset size, which will increase to about S$3 billion.
The manager of ESR-Reit is in exclusive discussions with the VIT managers, and the exclusivity will expire on either the date of execution of a definitive implementation agreement between the parties in relation to the scheme, or March 31, 2018, whichever is earlier.
The VIT managers have appointed a financial adviser, Merrill Lynch (Singapore), to exclusively advise them on the terms of the ESR proposal and the proposed merger.
VIT requested to lift its trading halt at 12.45pm, while ESR-Reit requested to lift its halt at 1pm.