Keppel DC REIT’s Bold \$1 Billion Equity Fundraising: A Strategic Move to Strengthen Growth and Flexibility

Keppel DC REIT has announced a significant equity fund raising initiative aimed at accumulating approximately S\$1 billion through a combination of private placement, preferential offering, and sponsor subscription. This ambitious financial strategy is designed to bolster the company’s ability to capitalize on growth opportunities and enhance its financial flexibility.

Key Details of the Fundraising

The equity fund raising comprises three main components:

• Private Placement: Raising a minimum of S\$600 million with new units priced between S\$2.074 and S\$2.128 each.
• Preferential Offering: Targeting approximately S\$300 million, with new units priced between S\$2.03 and S\$2.08.
• Sponsor Subscription: Keppel DC Investment Holdings Pte. Ltd. (KDCIH) subscribing for S\$85 million worth of new units at the private placement price to show support and alignment with existing unitholders.

Strategic Use of Proceeds

The gross proceeds from the equity fund raising will primarily be used to finance the Proposed Shares and Notes Transactions, which include acquiring interests in two data centers in Singapore. Additionally, a portion of the funds will cover related fees and expenses, while any remaining balance will be allocated for general corporate purposes or working capital.

Benefits and Impact on Shareholders

Shareholders can expect several benefits from this initiative:

• Strategic addition of AI-ready hyperscale data centers in a leading data center hub.
• Immediate distribution per unit accretion and potential for rental uplifts and capacity expansion.
• A stronger platform for long-term growth and enhanced financial flexibility.

The equity fund raising is also anticipated to decrease Keppel DC REIT’s aggregate leverage from approximately 39.7% to 33.3%, providing greater financial capacity for future growth opportunities.

Potential Market Impact

The issuance of approximately 466.9 million new units, representing a 27.1% increase in the total number of units, is expected to enhance trading liquidity and raise the profile of Keppel DC REIT among investors. This move could potentially influence the share price, given the scale and strategic importance of the fundraising.

Important Dates

Key events in the fundraising timeline include:

• Private Placement Launch: 19 November 2024
• Preferential Offering Record Date: 27 November 2024
• Listing and Trading of New Units: Early December 2024

Disclaimer

This article is for informational purposes only and does not constitute financial advice. Readers are advised to conduct their own research or consult a financial advisor before making any investment decisions. The opinions expressed in this article do not necessarily reflect those of the management of Keppel DC REIT.