SINGAPORE (Aug 2): The manager of CapitaLand Retail China Trust (CRCT) has proposed an equity fund raising to raise gross proceeds of between $273.4 million to $279.4 million.

The manager intends to use the gross proceeds from the equity fund raising to foot part of the $505.4 million bill for its proposed acquisition of three malls in China from sponsor CapitaLand.

First, CRCT will put up some 105 million new units in a private placement at an issue price of between $1.428 and $1.469. This will raise gross proceeds of approximately between $150.0 million and $154.3 million.

The private placement issue price range represents a discount of between 6.6% and 9.2% to the volume weighted average price (VWAP) of $1.5728 per unit of all trades in CRCT on Aug 1.

Next, CRCT is offering a pro rata and non-renounceable preferential offering of nearly 86.9 million new units – on the basis of 87 new units for every 1,000 existing units held as at 5pm on the books closure date of Aug 13 – at an issue price of between $1.420 and $1.440 each. This will raise gross proceeds of approximately between $123.4 million and $125.1 million.

The preferential offering issue price range represents a discount of between 8.4% and 9.7% to the VWAP of $1.5728 per unit.

The issue price per new unit for the private placement will be determined by the manager and the joint global co-ordinators and bookrunners following a book-building process, and the issue price per new unit for the preferential offering will be determined thereafter.

DBS Bank and JP Morgan (SEA) have been appointed as the joint global co-ordinators and bookrunners for the equity fund raising.

The manager intends to use approximately $268.4 million of the gross proceeds of the equity fund raising to finance part of its proposed acquisition of CapitaMall Xuefu and CapitaMall Aidemengdun in Harbin and CapitaMall Yuhuating in Changsha.

With a total gross floor area (GFA) of 248,282 sqm, the three multi-tenanted malls with established anchor tenants and specialty retail mix will expand CRCT’s portfolio GFA by 30.7% and boost the number of leases in its portfolio by 52%.

CRCTML says the accretive acquisition will diversify CRCT’s footprint in China from eight cities to 10 and enable it to gain exposure to two rising provincial capital cities with strong economic fundamentals and long-term growth potential.

See: CRCT to acquire three CapitaLand malls in China for $505 mil

Approximately $5.0 million of the gross proceeds will go towards the fees and expenses incurred in connection with the proposed acquisition and the equity fund raising, while any balance of the gross proceeds will be used for general corporate and working capital purposes.

Units in CRCT closed 4 cents lower, or down 2.5%, at $1.55 on Thursday before the announcement of the equity fund raising.