Ascendas REIT - RHB Invest 2016-08-02: Private Placement of 64m new units to raise proceeds of SGD150-155m.

Ascendas REIT - RHB Invest 2016-08-02: Private Placement of 64m new units to raise proceeds of SGD150-155m. Ascendas REIT ASCENDAS REAL ESTATE INV TRUST A17U.SI 

Ascendas REIT: Private Placement of 64m new units to raise proceeds of SGD150-155m.

  • AREIT has just announced a private placement of 64m new units to raise gross proceeds of no less than SGD150m.
  • We make no change to our BUY rating, forecast and DDM-derived TP (CoE: 7.5%, Tg: 1.5%) of SGD2.63, FY16/17 dividend yield of 6.3%, pending any unexpected positive details of its Australian acquisitions (reason for private placement). 
  • 64m placement is small compared to total issued units of 2.674bn: (2.39% pre-placement / 2.34% post-placement). Expect modest impact on AREIT's DPU.



Highlights

  • 64m new units at issue price of between SGD2.344 and SDG2.417 to raise gross proceeds of SGD150-155m.
  • Joint Lead Managers & Underwriters: DBS & Citi (fully underwritten)
  • Use of Proceeds:
    1. approximately SGD108.5m (72.3% of the gross proceeds) to partially fund the acquisitions of a business park property located in Sydney, Australia and a logistics property located in Melbourne, Australia and the associated costs, subject to completion of negotiations with the vendors and satisfactory due diligence. The purchase consideration of the Properties are expected to be approximately SGD185.0m;
    2. approximately SGD40.0 m (26.7% of the gross proceeds) to be used to fund an asset enhancement of a Hi-Specs property located in Singapore to convert the property from a multi-tenant building to a single-tenant building.
    3. approximately SGD1.5m (1.0% of the gross proceeds) to pay the estimated fees and expenses, including professional fees and expenses, incurred or to be incurred by A-REIT in connection with the Private Placement
    4. balance of the gross proceeds, if any, to be used for general corporate and/or working capital purposes
  • A-REIT’s Aggregate Leverage is expected to decrease from 36.2% as at 11 July 2016 to 34.7% immediately after the Placement . Thereafter, A-REIT’s Aggregate Leverage would be 36.1%, immediately after the Private Placement, assuming that the Proposed Acquisition and Asset Enhancement will be funded immediately after the Private Placement.
  • A-REIT is expected to still have borrowing capacity of approximately SGD1.6bn based on an assumed Aggregate Leverage of 45.0%.




Ong Kian Lin RHB Invest | http://www.rhbinvest.com.sg/ 2016-08-02
RHB Invest SGX Stock Analyst Report BUY Maintain BUY 2.63 SAME 2.63


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