Frasers Centrepoint Trust to buy additional 24.5% stake in Nex for $523.1 million
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FCT’s manager proposes a private placement to raise no less than $200 million to partially fund the acquisition.
PHOTO: FRASERS CENTREPOINT TRUST
Mia Pei
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SINGAPORE - Frasers Centrepoint Trust (FCT) is acquiring an additional 24.5 per cent effective interest in shopping mall Nex at Serangoon Central for $523.1 million from its sponsor Frasers Property.
The acquisition will value Nex at Serangoon Central, the largest suburban mall in the north-east of Singapore by net lettable area, at $2.13 billion, according to the announcement on Jan 25.
Mr Richard Ng, chief executive of FCT’s manager, said: “The acquisition follows from our initial acquisition of 25.5 per cent in Nex in February 2023 and will raise FCT’s effective interest to 50 per cent on completion.”
“Nex is an excellent asset with strong financial and operational performance, and is a strategic fit to FCT’s prime suburban retail portfolio,” he said, adding that the acquisition is also distribution per unit-accretive.
FCT’s portfolio comprises mainly suburban retail malls, including Causeway Point and Northpoint City’s North Wing.
The manager also highlighted that the proposed acquisition is subject to approval by unitholders at an extraordinary general meeting, the date of which will be determined later.
In a separate filing on the same day, FCT’s manager proposed a private placement at an issue price of between $2.16 and $2.204 per unit to raise no less than $200 million to partially fund the acquisition.
The proposed issue price range represents a discount of between about 1.8 and 3.8 per cent to the adjusted volume-weighted average price of $2.2446 per unit, and between about 3.6 and 5.6 per cent to the volume-weighted average price of $2.2871 per unit.
The manager said it intends to use the gross proceeds to repay existing debts, after partially funding the acquisition of the remaining 49 per cent stake in NP Trust and its trustee-manager.
On Jan 10, The Wall Street Journal reported that the majority owners of Frasers Property could put the company or some of its assets up for sale to raise capital to reduce debt burdens.
The company refuted the news on Jan 12, saying that it is “not aware” of any discussions to sell the company or its assets.
Frasers Property said in the bourse filing on Jan 25 that it intends to use the net proceeds from the proposed transaction for working capital purposes, including repaying and servicing borrowings.
FCT requested a trading halt before the market opened on the day. Frasers Property shares closed flat at 94 cents on Jan 25. THE BUSINESS TIMES
