Keppel DC REIT Raises S\$1.1 Billion in Oversubscribed Private Placement

Keppel DC REIT has announced the successful closing of its private placement and preferential offering, raising gross proceeds of approximately S\$1.1 billion. This move, designed to boost its equity fund, was met with strong demand, indicating robust investor confidence.

Key Highlights

• The private placement was oversubscribed, being 3.4 times covered with the Upsize Option and 4.0 times without it, reflecting significant interest from both new and existing unitholders, including institutional and accredited investors.
• The issue price was set at S\$2.090 per Private Placement New Unit, representing a 5.1% discount to the volume-weighted average price (VWAP) of S\$2.2017 per unit.
• The Preferential Offering New Units were priced at S\$2.03 per unit, offering a 7.8% discount to the VWAP.
• The equity fund raising includes S\$700.0 million from the Private Placement, S\$301.3 million from the Preferential Offering, and S\$85.0 million from the Sponsor Subscription.

Planned Utilization of Funds

The proceeds will be allocated as follows:

• Approximately S\$945.2 million (94.4%) to finance the Proposed Shares and Notes Transactions.
• Approximately S\$43.1 million (4.3%) for debt repayment, refinancing, capital expenditure, and asset enhancement initiatives.
• Approximately S\$13.0 million (1.3%) for fees and expenses related to the placement and offering.

Implications for Shareholders

Shareholders should note that the issuance of new units will not require their prior approval, as it falls under the General Mandate. The trading of these new units is expected to commence on the Singapore Exchange Securities Trading Limited (SGX-ST) on 28 November 2024.

Potential Impact on Share Price

The substantial discount on the issue prices, combined with the significant oversubscription, could potentially impact the share price due to dilution effects and market perception of the REIT’s growth prospects.

Investors should remain informed about how the raised funds will be deployed and monitor for any deviations from the stated use, which could affect the REIT’s financial health and future share value.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. Investors are urged to consult their financial advisors before making any investment decisions. The past performance of Keppel DC REIT is not indicative of future results. Any forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially.