CapitaLand Retail China Trust (SGX:AU8U) (CRCT) announced on Tuesday morning that it is undertaking a private placement as well as a non-renounceable preferential offering to raise gross proceeds of up to S$300 million.
CRCT will be offering 184.41 million new units under the Private Placement to eligible institutional, accredited and other investors to raise gross proceeds of no less than approximately S$220.0 million. The offer can be upsized with another 20.956 million new units for an additional S$25 million.
The issue price of S$1.193 to S$1.236 represents a discount of between 3.4% to 6.8% to the closing price of S$1.2800 per unit of all trades traded on Singapore Exchange Securities Trading Limited (SGX-ST) on 16 November 2020, the day before the Underwriting Agreement was signed. This also represents a discount of approximately 4.1% to 7.5% to the volume weighted average price (VWAP) of S$1.2891 per unit of all trades on SGX-ST on 16 November.
Citigroup Global Markets Singapore Pte. Ltd., DBS Bank Ltd. and The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch have been appointed as the joint global co-ordinators and bookrunners for the Equity Fund Raising.
The issue price for the Private Placement will be announced after it has been determined by the REIT Manager and the Joint Global Co-ordinators and Bookrunners following a book-building process.
CRCT will be offering up to 68.998 million new units to eligible unitholders to raise gross proceeds of no less than approximately S$80 million. The issue price of S$1.170 to S$1.210 represents a discount of between 5.5% to 8.6% to the previous day closing price of S$1.280 per unit, and an approximate discount of between 6.1% to 9.2% to the VWAP of S$1.2891 per unit.
The number of new units that unitholders are eligible for will be announced after 5pm on 25 November. Unitholders can accept or decline their provisional allotment or even apply for excess new units. The issue price for the Preferential Offering will be determined once the Private Placement Issue Price has been determined.
Use of Proceeds:
The Manager intends to use the net proceeds from the Equity Fund Raising to finance part of the total acquisition cost of the proposed acquisition of the respective interests in the companies which hold the Ascendas Xinsu Portfolio, Ascendas Innovation Towers, Ascendas Innovation Hub, Singapore-Hangzhou Science and Technology Park Phase I and II and Rock Square (the Acquisition) of approximately S$822.4 million. 97.7% or approximately S$293.9 million will be used to finance part of the total acquisition cost of the Acquisition, with the remaining 2.3% (S$6.8 million) used to pay the fees and expenses incurred for the equity fundraising.
The New Units will be issued pursuant to a general mandate (the General Mandate) given to the Manager at the annual general meeting held on 24 June 2020 which allows the Manager to issue new Convertible Securities (Units and/or warrants, options, debentures or other instruments convertible into Units) as long as the number of new units does not exceed 50% of the total number of Units in issue as at 24 June 2020 (Base Figure). In addition, the aggregate number of new Units to be issued other than on a pro rata basis shall not be more than 20% of the Base Figure of 1,222,871,665. This mandate is valid from 24 June 2020 to the next AGM.
As the maximum number of New Units to be issued pursuant to the Private Placement (including the Upsize Option) is within the 20.0% limit (at 16.8%) for issue of new Units other than on a pro rata basis, and the maximum number of New Units to be issued pursuant to the Preferential Offering is within the 50.0% limit (at 22.4%) for issue of new Units on a pro rata basis, the prior approval of the Unitholders is not required for the issue of the New Units under the Equity Fund Raising.
Retail Crown Pte. Ltd. (RCPL) has also provided an irrevocable undertaking to the Manager that it will subscribe to its total provisional allotment of the Preferential Offering Units corresponding to its direct interest in CRCT of approximately 19.09% (Pro Rata Units), as well as any additional Preferential Offering Units in excess of the Pro Rata Units (RCPL Excess Units) amounting to CapitaLand Integrated Commercial Trust’s (CICT) total provisional allotment of the Units corresponding to CICT’s direct interest in CRCT of approximately 10.82% (“CICT Pro Rata Units”), should any CICT Pro Rata Units remain unsubscribed at the end of the exercise.
CRCTML (in its own capacity), being a wholly owned subsidiary of CapitaLand, has also irrevocably undertaken to the Manager on 6 November 2020 that subscribe in full for the total provisional allotment of the Preferential Offering Units corresponding to its direct interest in CRCT of approximately 6.31%.
Distribution of Dividends
Existing unitholders in CRCT will receive an advanced distribution of dividends (currently estimated to be 2.75 Singapore cents) for period 1 July 2020 to the date immediately prior to the date on which new units are issued for the Private Placement (currently estimated to be on 4 December 2020).
The next distribution following the advanced distribution will comprise CRCT’s distributable income for the period from the day the New Units are issued pursuant to the Private Placement to 31 December 2020. Semi-annual distributions will resume thereafter.
The New Units issued in accordance to the Private Placement will, rank pari passu in all respects with existing Units in issue on the date prior to the date of the Private Placement, except that unitholders will not be eligible to receive the advanced distribution and are not eligible to participate in the Preferential Offering.
The New Units issued in accordance to the Preferential Offering will also rank pari passu in all respects with existing Units in issue on the date prior to the date of the Preferential Offering, except that unitholders will not be eligible to receive the advanced distribution.
CRCT called for a trading half on 8:24 am on Tuesday which has not been lifted at time of writing.
CapitaLand (SGX:C31) announced yesterday that they’ll be increasing its exposure to China in new economy assets by S$3.5 billion to S$5 billion over the next few years.