Ascendas India Trust launches private placement to raise at least S$100 million

Indian sweets in Little India in Singapore; taken July 2018.Indian sweets in Little India in Singapore; taken July 2018.

Ascendas India Trust has launched a private placement of at least 66.31 million new units at S$1.465 to S$1.508 each to raise gross proceeds of at least S$100 million, the trust said in a filing to SGX Tuesday.

The price range offers a discount of 2.9 percent to 5.7 percent to the volume weighted average price of S$1.5538 for trades on Monday, Ascendas India Trust said. The price will be determined after a book-building process, the filing said.

The new units, which will be offered to eligible institutional and other accredited investors, represent an around 6.4 percent increase in the total number in issue, the filing said.

The proceeds are earmarked to partially finance the initial costs of phase one of a business park in Bangalore, prior to acquiring it, the trust said, adding the investment will be via subscribing to non-convertible debentures (NCD).

Under the deal, the trust will subscribe to NCDs from the seller totaling 7.5 billion Indian rupees, or around s$144 million, with coupons paid to the trust, the filing said. Ascendas India Trust will then acquire phase one for up to 17.3 billion rupees, or around S$333 million, the filng said.

Ascendas India Trust said phase one will have an estimated total net leasable area of 1.7 million square feet and is expected to be build and acquired within four years of the providing funds. The full project is expected to be carried out in several phases over around 10 years, depending on market demand, the trust said.

The deal will allow the trust to expand in Bangalore, which has seen robust rental growth amid healthy demand from global blue chip companies, Ascendas India Trust said, adding the project is in a prime office corridor accounting for a “significant portion” of office leasing transactions in the area.

The micro-market’s rents have been increasing at 10 percent a year from 2014-2018, the trust said.

The trust estimated the advanced distribution for the period from 1 October to the day before the new units are issued will be around 1.48 Singapore cents.

Citigroup Global Markets Singapore and DBS Bank are joint bookrunners and underwriters for the issue, the filing said.

Units of Ascendas India Trust have been halted from trade.

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