Keppel DC REIT’s \$1 Billion Equity Fund Raising: Shareholder Implications and Tax Considerations

Keppel DC REIT has announced a significant equity fund raising initiative aimed at generating gross proceeds of approximately S\$1 billion. This move could potentially impact share values and offers several key points that shareholders need to be aware of.

Key Announcements

The transfer books and register of unitholders will close on November 27, 2024, marking the Preferential Offering Record Date. This is crucial for determining the provisional allotment of new units to entitled unitholders and their entitlements to distributable income from July 1, 2024, to November 27, 2024. The Private Placement New Units are slated for listing on the SGX-ST by November 28, 2024.

Advanced Distribution Details

An Advanced Distribution is anticipated, with an estimated distribution per unit ranging from 4.063 to 4.103 cents. This comprises taxable income, tax-exempt income, and capital distribution, ensuring fairness to existing unit holders. The exact distribution will be announced in due course, and it is expected to be paid by February 10, 2025.

Important Shareholder Information

Current unit holders must note that the Private Placement New Units will rank pari passu with existing units, but will not partake in the Advanced Distribution or the Preferential Offering. The Preferential Offering New Units, however, will participate in future distributions post-issuance.

Tax Implications

The announcement also covers tax implications, indicating that tax-exempt income distributions will not be taxed. Qualifying unitholders, including individuals, Singapore-resident companies, and certain international organizations, will receive gross distributions without tax deductions. However, non-individual foreign unitholders will receive distributions net of a 10% tax, provided they meet specific criteria. Relevant tax declaration forms must be submitted by December 16, 2024, to avoid a 17% tax deduction.

Critical Dates for Investors

• November 25, 2024: Last date for units to be quoted on a “cum-distribution” basis.
• November 27, 2024: Closure of the transfer books and register of unitholders.
• December 16, 2024: Deadline for submitting tax declaration forms.

Potential Market Impact

This equity fund raising and the associated distributions could influence market perceptions and share values, making it essential for investors to stay informed about these developments.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors should conduct their own research or consult with a financial advisor.

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