Keppel DC REIT’s Billion-Dollar Equity Fundraising: A Strategic Leap Forward

Keppel DC REIT Management Pte. Ltd. has launched a significant equity fundraising initiative aimed at raising gross proceeds of approximately S\$1 billion. This move is expected to strategically position the company for future growth and stability, potentially impacting share values favorably.

Key Highlights of the Fundraising

The fundraising will be executed through three key channels:

• Private Placement: Institutional and other investors will have access to new units priced between S\$2.074 and S\$2.128, aiming to raise no less than S\$600 million.
• Preferential Offering: Entitled Unitholders can subscribe on a pro-rata basis at a price between S\$2.03 and S\$2.08, targeting S\$300 million in proceeds.
• Sponsor Subscription: Keppel DC Investment Holdings Pte. Ltd. will subscribe to units worth S\$85 million to reinforce its commitment to the REIT.

Shareholder Considerations

Shareholders should note the potential share price impact due to the expansion of the unit base by approximately 466.9 million new units, representing a 27.1% increase. The move is designed to strengthen Keppel DC REIT’s balance sheet, enabling it to capitalize on growth opportunities and enhance trading liquidity.

Strategic Benefits

The proceeds will primarily finance the acquisition of interests in two data centre buildings in Singapore, signaling a strategic expansion into AI-ready hyperscale data centers. Key benefits include:

• Strategic addition to Asia’s top data centre hub.
• Immediate distribution per Unit accretion.
• Enhanced growth via rental uplifts and capacity expansion.
• Improved platform for long-term growth.

Financial Flexibility and Reduced Leverage

The Equity Fundraising is expected to decrease Keppel DC REIT’s Aggregate Leverage from 39.7% to approximately 33.3%, thereby enhancing its financial flexibility to pursue further growth opportunities, including acquisitions of income-generating data centres.

Important Timelines

The indicative timeline includes:

• Launch of Private Placement: 19 November 2024
• Listing of Private Placement New Units: 28 November 2024
• Opening of the Preferential Offering: 2 December 2024
• Listing of Preferential Offering New Units: 18 December 2024

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 before making investment decisions. Past performance is not indicative of future results.