SINGAPORE – ESR-Logos Reit’s manager has proposed a $300 million equity fund-raising exercise to fund future acquisitions, redevelopments and asset enhancement initiatives (AEIs).
This will be accomplished through a private placement and a preferential offering, which will raise $150 million each, the real estate investment trust’s (Reit’s) manager said on Thursday.
It plans to issue between 447.8 million and 454.5 million new private placement units at an issue price ranging between 33 cents and 33.5 cents.
This represents a discount of between 4.3 per cent and 5.8 per cent to ESR-Logos Reit’s volume-weighted average price (VWAP) of 35.02 cents per unit for all trades done on Feb 15, the day before the placement agreement was signed.
Each new preferential offering unit will be issued at a 0.5 cent discount to the private placement price, representing a discount of between 5.8 per cent and 7.2 per cent to the VWAP.
Based on pro forma estimates, had the proposed equity fund raising been completed on Dec 31, 2022, the Reit’s net asset value per share would have decreased to 35.9 cents from 36.4 cents. Its aggregate leverage would also drop to 38 per cent from 41.8 per cent.
The manager will use around $293 million in gross proceeds from the fund raising to fund any future potential acquisitions and finance any redevelopment or AEIs of ESR-Logos Reit’s properties. The remaining $7 million will be used to pay any fees and expenses incurred by the Reit in connection with the fund-raising exercise.
In connection with the private placement, the manager plans to declare an advanced distribution of between 0.426 cent and 0.47 cent to ensure fairness to holders of existing units. This will apply to the period from Jan 1 up until the day before the private placement units are issued – estimated to be on or around Feb 27.
The manager also said it will issue a circular concerning the preferential offering’s details and seek unit holder approval for the preferential offering at an extraordinary general meeting to be convened.
Citigroup Global Markets Singapore, DBS Bank and UOB are the joint book runners and underwriters for the private placement. RHB Singapore has been appointed the sole financial adviser and coordinator for the preferential offering.
ESR-Logos Reit ended flat at 35 cents on Wednesday. The manager called for a trading halt on Thursday morning before the market opened. THE BUSINESS TIMES
