Cromwell European REIT launches private placement to raise at least 100 million euros

Singapore two-dollar bills

Cromwell European REIT proposed a private placement of 217.39 million new units at 0.46 euro to 0.47 euro each to raise at least 100 million euros (S$153.18 million or US$112.96 million) to fund the acquisition of six properties, the REIT said in a filing to SGX Friday.

The issue price range is a discount of 7.7 percent to 9.6 percent to the volume weighted average price of 0.5091 euros a unit for trades on SGX on Thursday, the filing said.

The offering will be made to eligible institutional, accredited and other investors, the REIT said.

“The acquisition of the properties will be financed by a combination of debt and equity so as to ensure that the acquisition will provide overall distribution per unit accretion to unitholders while maintaining an optimum level of gearing,” the REIT said.

“The private placement represents a fast and efficient means of raising capital to finance the acquisition of the properties with certainty,” it added.

In addition, the equity issue is expected to boost the number of units by at least 9.9 percent, assuming the upside option isn’t exercised, which is expected to improve the units’ trading liquidity, the REIT said.

Around 91.7 million euros of the proceeds are earmarked to partially fund the acquisition of three properties in France and three in Poland, the REIT said.

The fees and expenses, including land transfer taxes, are estimated to take up around 8.3 million euros of the proceeds, the filing said.

Any remaining proceeds will be used for general corporate and/or working capital purposes, the REIT said.

The new units are expected to be listed on 2 July, the REIT said.

Credit Suisse (Singapore) and UBS’s Singapore branch are joint lead managers and underwrites for the placement, the filing said.

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