The gross proceeds raised will be used to fund the proposed acquisition of 24 properties in China, Malaysia and Vietnam, which was announced by MLT on Monday in a separate bourse filing.
Citigroup Global Markets Singapore Pte. Ltd., DBS Bank Ltd., The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch and Oversea-Chinese Banking Corporation Limited have been appointed as the joint global co-ordinators and bookrunners for the Equity Fund Raising
A private placement is a sale of stock shares or bonds to pre-selected investors and institutions rather than on the open market.
MLT will be offering between 222 million to 228.1 million new units under the Private Placement to eligible institutional, accredited and other investors.
This will raise gross proceeds of approximately S$450 million.
There is also the option to upsize the offer with another 25 million new units for an additional S$50 million gross proceeds. The issue price of S$1.940 to S$2.027 represents a discount of between 1.2% to 3.8% to the adjusted volume weighted average price of S$2.0513 per unit.
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.
A preferential offering is also known as a non-renounceable rights issue. This means that the rights cannot be sold for cash if a shareholder does not want to pay for the rights to convert them to units.
MLT will be offering up to 76 million new units to eligible unitholders to raise gross proceeds of up to S$150 million. The issue price of S$1.940 to S$1.990 represents a discount of between 3.0% to 5.4% to the adjusted volume weighted average price of S$2.0513 per unit.
The number of new units that unitholders are eligible for will be announced after 5pm on 28 October. 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.
The Sponsor of MLT, Mapletree Investments Pte Ltd, which owns an aggregate interest of approximately 30.59% of MLT, has also provided an irrevocable undertaking to the Manager and the Joint Global Co-ordinators and Bookrunners that it (and its subsidiaries) will subscribe to its full provisional allotment of the new units under the preferential offering.
Use of Proceeds
MLT intends to use 97.3% of the gross proceeds (S$632.5 million) to fund Acquisitions in 50% of 15 properties and 100% of 7 properties in China, 1 property in Malaysia and 1 property in Vietnam. The remaining 2.7% of the gross proceeds (S$17.5 million) will be used to pay the fees and expenses incurred for the equity fundraising.
The acquisitions will be subject to the approval of unitholders to be sought at an extraordinary general meeting of unitholders. In the event that MLT does not proceed with the proposed acquisitions, the proceeds from the Equity Fund Raising shall be re-deployed to fund future investments and/or to pare down debt.
Distribution of Dividends
Existing unitholders in MLT will receive an advanced distribution of dividends for period 1 October 2020 to the date immediately prior to the date on which new units are issued for the Private Placement (currently estimated to be on 29 October 2020).
This will be in addition to the 2Q FY20/21 distribution of 2.055 Singapore cents per unit for period 1 July to 30 September 2020 (as announced on 19 October). Together, the advanced distribution and 2Q FY20/21 distribution is estimated to be between 2.669 Singapore cents and 2.687 Singapore cents.
The subsequent dividend distribution will comprise MLT’s distributable income for the period from the day the new units are issued pursuant to the Private Placement, to 31 December 2020.
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 2Q FY20/21 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 and 2Q FY20/21 distribution.
MLT called for a trading half on 7:35am on Tuesday which has not been lifted at time of writing.