SPH REIT launches private placement to raise at least around S$162 million

Singapore two-dollar bills

SPH REIT launched a private placement of 156.65 million new units at S$1.031 to S$1.075 each to raise at least S$161.5 million, the REIT said in a filing to SGX Thursday.

The price range represents a discount of between 3.2 percent and 7.2 percent of the volume weighted average price of S$1.111 for trades Wednesday, SPH REIT said. The price will be set by a book-building process, the REIT said.

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

The proceeds are earmarked to partially fund the acquisition of the Westfield Marion Shopping Centre located in South Australia, SPH REIT said.

The acquisition will be funded by the proceeds of the S$300.0 million of perpetual securities issued on 30 August 2019, debt and equity, the filing said.

“The manager believes that the private placement, in combination with perpetual securities and debt financing, is an efficient and overall beneficial method of raising funds to finance the proposed acquisition,” the REIT said.

“In addition, the increase in the total number of units in issue and enlarged unitholder base is expected to enhance the trading liquidity of the units and raise the profile of SPH REIT among investors,” it added.

SPH REIT said it would pay a cumulative distribution estimated at 1.37 Singapore cents to 1.41 Singapore cents for the 1 September to 1 December period, with the new units expected to be issued 2 December.

SPH REIT requested a trading halt before the market open Thursday.

Credit Suisse (Singapore), HSBC’s Singapore branch and OCBC were appointed as the joint lead managers and underwriters, the filing said.