SINGAPORE - Frasers Commercial Trust (FCOT) has priced an upsized S$100 million placement of units at S$1.48 apiece, the top end of its indicated price range.
The commercial property landlord had planned to issue at least S$80 million of units at between S$1.44 and S$1.48 per unit, with an over-allotment option of at least S$17.8 million. DBS bank and Merrill Lynch (Singapore) were joint book runners for the private placement.
In a Singapore Exchange (SGX) filing on Wednesday morning (Jan 24), FCOT said the placement was over five times subscribed, and saw "strong participation from new and existing institutional investors".
Book orders for the placement closed on Jan 23. With the exercise of the upsize option, a total of 67.6 million new units will be issued.
The issue price of S$1.48 represents a discount of about 3.4 per cent to the volume weighted average price of S$1.53 for trades done on Jan 23, the date the placement agreement was entered into.
FCOT's manager, Frasers Centrepoint Asset Management (Commercial) Ltd, said it intends to use about S$98.5 million, or 98.5 per cent of the gross proceeds to partially fund the proposed acquisition of a 50 per cent stake in Farnborough Business Park. The property is located at Farnborough, Thames Valley, in the west of London.
The remaining S$1.5 million of the proceeds will be used to pay placement-related expenses.
In a separate statement, FCOT said it will finance the acquisition of Farnborough Business Park through a combination of equity and debt financing, so as to "ensure that the proposed acquisition will provide overall distribution per unit accretion to unitholders, while maintaining a well-balanced capital structure".
The group also believes that a private placement is an efficient method of raising funds to partially finance the proposed acqusition.
Trading of FCOT's new units is expected to commence at 9am on Feb 1.
As at 10.10am on Wednesday, units of FCOT were trading at S$1.52, unchanged from the previous day's close. Some 2.18 million units changed hands.