Keppel DC REIT Launches S\$1 Billion Equity Fund Raising: A Game Changer for Shareholders

Keppel DC REIT has announced a bold move to raise approximately S\$1 billion through an equity fund raising initiative. This strategic decision involves a private placement, a preferential offering, and a sponsor subscription, aiming to strengthen its financial position and capitalize on new growth opportunities.

Key Highlights of the Equity Fund Raising

• Keppel DC REIT plans to issue new units to raise gross proceeds of no less than S\$985 million.
• The initiative includes a private placement, a non-renounceable preferential offering, and a sponsor subscription with Keppel DC Investment Holdings Pte. Ltd. (KDCIH).
• The private placement aims to raise approximately S\$600 million, while the preferential offering is set to bring in around S\$300 million.
• KDCIH will contribute approximately S\$85 million through the sponsor subscription, reinforcing its commitment and aligning interests with other unitholders.

Important Considerations for Shareholders

Shareholders should note several critical factors that could influence share values:

• The issue prices for the new units represent discounts ranging from 3.3% to 7.8% of the volume-weighted average price, potentially affecting market perceptions and share valuations.
• The overall equity fund raising is expected to reduce Keppel DC REIT’s aggregate leverage from 39.7% to approximately 33.3%, enhancing its financial flexibility.
• This initiative is anticipated to increase the number of units in issue by approximately 27.1%, which could enhance trading liquidity and attract more investors.
• The fund raising will partially finance the acquisition of strategic, artificial intelligence-ready data centres, promising immediate distribution per unit accretion.

Potential Impact on Share Prices

The strategic acquisition of new data centres, coupled with the strengthened financial position, may increase Keppel DC REIT’s attractiveness to investors, potentially boosting share prices. Additionally, the increase in trading liquidity could also positively impact the share value.

Timeline and Future Prospects

The timeline for key events includes the listing and trading of new units in late November 2024, with further developments anticipated in early 2025. This initiative could position Keppel DC REIT to seize future growth opportunities, creating long-term value for shareholders.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors should perform their own research or consult a financial advisor before making investment decisions. The information contained herein is based on the announcement from Keppel DC REIT and may be subject to changes.