Keppel DC REIT’s S\$1.1 Billion Equity Fund Raising: A Strategic Move for Growth
Keppel DC REIT’s S\$1.1 Billion Equity Fund Raising: A Strategic Move for Growth
Keppel DC REIT Management Pte. Ltd. has announced the successful pricing and results of its equity fund raising to secure gross proceeds of approximately S\$1.1 billion. This substantial financial maneuver involves a combination of private placement, preferential offering, and sponsor subscription, aimed at fortifying the company’s financial standing and supporting its future growth initiatives.
Key Details of the Equity Fund Raising
The equity fund raising process, managed by prominent financial institutions including Citigroup Global Markets Singapore, DBS Bank, and others, witnessed robust investor interest. The private placement was oversubscribed, with a 3.4 times coverage including the Upsize Option, and 4.0 times excluding it. The final amount raised through the private placement increased to approximately S\$1,086.3 million, driven by strong demand from institutional and accredited investors.
Pricing Strategy and Investor Appeal
The issue price for the Private Placement New Units was set at S\$2.090, reflecting a discount of approximately 5.1% to the volume weighted average price (VWAP) of S\$2.2017. The Preferential Offering New Units were priced at S\$2.03, offering a 7.8% discount to the VWAP. These strategic pricing decisions highlight Keppel DC REIT’s commitment to attracting diverse investor participation while maintaining competitive pricing.
Allocation and Use of Proceeds
A total of 334,929,000 Private Placement New Units and 148,413,063 Preferential Offering New Units will be issued. The proceeds will be allocated primarily to finance proposed shares and notes transactions, repay debt, and cover associated expenses. Notably, S\$945.2 million will be directed towards financing acquisitions, while S\$43.1 million will address debt and capital expenditures.
Shareholder Implications and Market Impact
This strategic financial move may have significant implications for Keppel DC REIT’s share value. The ability to attract substantial investment from both new and existing unitholders underscores the market’s confidence in the company’s growth trajectory. Shareholders should monitor the deployment of these funds closely, as successful execution of planned acquisitions could positively impact the company’s financial performance and unit value.
Regulatory and Listing Information
The Private Placement New Units will be listed for trading on the SGX-ST, with trading expected to commence on 28 November 2024. The issuance of these units is authorized under a General Mandate, eliminating the need for additional unitholder approval, thereby streamlining the process.
Investors are advised to stay informed about the utilization of proceeds, as the Manager will provide updates on their material use. Any deviations from the planned allocation will be communicated transparently to maintain investor confidence.
Disclaimer
This article is for informational purposes only and does not constitute financial advice. Investors are encouraged to conduct their own research or consult with a financial advisor before making investment decisions. The past performance of Keppel DC REIT is not indicative of future results. The value of units can fluctuate, and there is a risk of losing the principal invested.
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