ESR-Reit raises $100m from upsized private placement at lower end of price range

SINGAPORE - ESR-REIT will issue about 194.2 million new units under its upsized private placement to raise gross proceeds of $100 million, the manager of the mainboard-listed real estate investment trust (Reit) said in a bourse filing early Tuesday morning (June 18).

The joint global coordinators and bookrunners for the placement, Citigroup Global Markets Singapore and RHB Securities Singapore, closed the order book for the placement on Tuesday.

The issue price was fixed at 51.5 cents per new unit - at the lower end of the 51.5-52.5 cents range earlier announced on Monday.

The issue price of 51.5 cents represents a discount of 8.3 per cent to the volume weighted average price of 56.16 cents per unit for all trades done on June 14.

The private placement was around 2.5 times covered, based on the $100 million gross proceeds. It saw "strong participation" from new and existing institutional and other investors, ESR-Reit's manager said.

The upsize option, to bump up gross proceeds from $75 million to $100 million, was exercised in full.

The placement is part of an equity fundraising - which also comprises a preferential offering - to fully finance ESR-Reit's acquisition of a warehouse in Jurong and its asset enhancement works at two existing assets as well as to repay existing debt.

The manager said it has no intention of raising more than $150 million in total gross proceeds from both the private placement and the preferential offering.

Of this $150 million, about $44.4 million will fund the warehouse acquisition and $45.7 million will go into the asset enhancement works at Ang Mo Kio and Changi. Some $56.8 million will repay ESR-Reit's existing debts and $3.1 million will be used to pay transaction-related expenses.

For the preferential offering, ESR-Reit has not determined the issue price. A financial adviser will be appointed to manage the offering, the Reit's manager said on Monday.

On Tuesday morning, ESR-Reit requested for its trading halt to be lifted.