SPH Reit to raise at least $161.5m via private placement

SPH Reit has launched a private placement to raise at least $161.5 million to partially fund its proposed A$670 million (S$621 million) acquisition of a 50 per cent stake in a shopping centre in South Australia.

The private placement will see the listing of 156.6 million new units at an issue price of between $1.031 and $1.075 per unit, the manager said yesterday.

The issue price represents a discount of between 3.2 and 7.2 per cent to the volume-weighted average price (VWAP) of $1.111 per unit of all trades done on Wednesday - the market day before the placement agreement was signed.

It also represents a discount of between 2 and 6 per cent to the adjusted VWAP - which subtracts the estimated cumulative distribution of around 1.39 cents, the midpoint of an estimated range of between 1.37 cents and 1.41 cents per unit.

Out of the $161.5 million gross proceeds, around $159.5 million or 98.7 per cent will partially fund the acquisition.

Some $2 million or 1.3 per cent will be used to pay estimated fees and expenses in connection with the private placement and proposed acquisition.

Any balance of gross proceeds will be used for general corporate or working capital purposes.

The new units are expected to be listed on Dec 2 upon receiving in-principle approval from the Singapore Exchange.

SPH Reit announced on Nov 7 that it was planning to buy a 50 per cent stake in Westfield Marion Shopping Centre, a 1.5 million sq ft mall in New South Wales.

Freehold Westfield Marion, billed as "the only super-regional shopping centre" in the state of South Australia, has three storeys of retail space and five office floors, with 5,270 parking lots.

The manager said at the time that it planned to pay for the deal with a mix of proceeds from the August issuance of $300 million of perpetual securities, as well as debt and/or equity fundraising.

A trading halt in the units was called yesterday morning before the market opened; SPH Reit units closed flat at $1.11 on Wednesday.

SPH Reit's sponsor is Singapore Press Holdings, which publishes The Straits Times.

A version of this article appeared in the print edition of The Straits Times on November 22, 2019, with the headline 'SPH Reit to raise at least $161.5m via private placement'. Print Edition | Subscribe