Keppel DC REIT’s Ambitious \$1 Billion Fundraising Plan: A Game Changer for Shareholders?

Keppel DC REIT has announced a significant equity fund raising initiative, aiming to generate gross proceeds of approximately S\$1 billion. This bold move is intended to finance the acquisition of interests in two data centers in Singapore and to support further growth opportunities. Here are the key points shareholders should be aware of:

Key Highlights:

• Equity Fund Raising Details: The fund raising includes a private placement, a non-renounceable preferential offering, and a sponsor subscription, with the issue price per new unit ranging from S\$2.03 to S\$2.128.
• Discounts Offered: The issue prices represent a discount to the volume weighted average price (VWAP) of the units, which could potentially attract more investors.
• Use of Proceeds: The majority of the funds will be used to partially finance the acquisition of shares in Memphis 1 Pte. Ltd., with a portion allocated for fees and general corporate purposes.
• Strategic Acquisition: The acquisition includes artificial-intelligence-ready hyperscale data centers, promising strategic expansion in Asia’s data center hub.

Shareholder Considerations:

• Potential Share Price Impact: The equity fund raising is expected to strengthen Keppel DC REIT’s balance sheet, enhance financial flexibility, and possibly increase the trading liquidity of its units.
• Undertakings and Approvals: Keppel DC Investment Holdings and Keppel DC REIT Management have provided irrevocable undertakings to subscribe to their shares in the offering, demonstrating strong insider support.
• Regulatory Approvals: The issuance of new units is subject to various regulatory approvals, including compliance with the SGX-ST’s listing requirements.
• Advanced Distribution: An advanced distribution is intended for existing units prior to the issuance of new units, ensuring fairness to current unitholders.

This fund raising initiative is poised to significantly impact Keppel DC REIT’s market position and shareholder value. Shareholders are encouraged to consider the potential benefits and risks associated with this move.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors are advised to conduct their own research and consult financial advisors before making investment decisions.

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