SINGAPORE - OUE Hospitality Trust (OUE H-Trust) is launching a rights issue to raise S$238.6 million to fund the acquisition of the Crowne Plaza Changi Airport Extension (CPEX), it said late on Monday night.
OUE H-Trust is a stapled group comprising OUE Hospitality Real Estate Investment Trust (OUE H-REIT) and OUE Hospitality Business Trust (OUE H-BT).
Eligible stapled securityholders will be offered the new stapled securities at the rights ratio of 33 rights stapled securities for every 100 existing stapled securities in OUE H-Trust held as at the rights issue books closure date.
The rights stapled securities will be issued at 54 cents, which represents a discount of about 29.4 per cent to the closing price of 76.5 cents per stapled security in OUE H-Trust on Monday.
CPEX is currently under construction, and the acquisition will be completed when the construction is finished, likely in the middle of this year, and the temporary occupation permit is obtained.
CPEX is a 243-room extension to the operating 320-room Crowne Plaza Changi Airport, which OUE H-Trust acquired last year.
When the construction of CPEX is completed, its integration with the existing hotel will offer a total of 563 hotel rooms.
The hotel is connected to Changi Airport Terminal 3 on both the arrival and departure levels and easily accessible from Changi Airport Terminals 1 and 2.
Mr Christopher Williams, the chairman of OUE Hospitality REIT Management, the manager of OUE H-REIT, said the acquisition of Crowne Plaza Changi Airport had contributed positively to OUE H-Trust's income and reduced its income reliance on any single property.
"The addition of CPEX... will further enhance the income diversification of OUE H-Trust. The acquisition of CPEX will also increase OUE H-Trust's portfolio size to about $2.26 billion comprising three strategically located quality assets," he said.
Mr Chong Kee Hiong, the chief executive of OUE Hospitality REIT Management, added: "Following the rights issue and the completion of the acquisition of CPEX, OUE H-Trust's gearing will be reduced from 42 per cent to approximately 37.8 per cent. This will enhance OUE H-Trust's financial flexibility and increase its capacity for potential acquisitions to continue growing the portfolio."
To demonstrate support for OUE H-Trust and the rights issue, OUE Limited, OUE Hospitality REIT Management, Golden Concord Asia Limited, OUE Realty and Hennessy Holdings Limited will subscribe in full for their provisional allotment of the rights stapled securities, which in total represents approximately 44.2 per cent of the rights issue.
The remaining rights are underwritten by BNP Paribas, acting through its Singapore branch, DBS Bank Ltd and Credit Suisse (Singapore) Limited.