Ascott Residence Trust plans private placement to raise S$150M

Singapore 50 dollar bill

Ascott Residence Trust plans a private placement of up to 152.6 million stapled securities at S$0.983 to S$1.014 each to raise S$150 million, with some of the proceeds earmarked to fund the acquisition of a student accommodation asset in Texas, the trust said in a filing to SGX Thursday.

“The private placement will enhance ART’s financial position and liquidity and building a war chest for future acquisitions,” Ascott Residence Trust said in the statement. “ART will be able to act more expeditiously when pursuing acquisition opportunities.”

In addition, the increased number of stapled securities is expected to improve trading liquidity, ART said.

The issue price range is at a 2.5 percent to 5.5 percent discount to the volume weighted average price of S$1.04 for trades on Wednesday, the trust said. The pricing will be determined after a book-building process, the filing said.

The new stapled securities will be offered to institutional, accredited and other investors, ART said.

The new issuance will increase the number of stapled securities by around 4.9 percent, raising the free float to around 61 percent from 59 percent previously, the filing said.

ART said around S$58.7 million of the proceeds will be used to partially fund the Texas acquisition and around S$89 million will partially fund any future potential acquisitions, including student accommodation and multi-family rental housing properties in developed markets.

The placement is fully underwritten by the joint lead managers and underwriters, J.P. Morgan (S.E.A) and OCBC, the filing said.

The trust said Thursday it has agreed to acquire a 1,005-bed student accommodation asset in Texas for US$70 million, or around S$93.8 million, marking its third investment in the sector in the past seven months.

On the day before the new stapled securities are issued, ART plans to pay an advanced distribution to existing security holders for the period of 1 July to 19 September, with the amount estimated at 0.486 Singapore cent to 0.586 Singapore cent each, the trust said.

The new stapled securities are expected to be listed on or around 20 September, the filing said.

Shareholder approval is not required for the private placement, the filing said.