SINGAPORE (May 22): On May 13, during a 1HFY2020 results briefing by Frasers Property’s (FPL) management, there were some questions on the company’s higher gearing, which had risen to 106.8% by March 31, 2020, from 85.9% as at Sept 30, 2019. The company’s net gearing rose partly because of a redemption of $700 million of perpetual securities or perps.

FPL announced that its net debt had in-creased by $2,242 million to $15.76 billion by March 31, from $13.81 billion as at Sept 30, 2019. Of this, $700 million was due to the redemption of perpetual securities. The remainder comprised of the net drawdown of bank borrowings for the acquisitions of properties in Australia and the UK, the development of properties in Australia and Thailand, and the redemption of shares in PGIM ARF.

The redemption of the perpetual securities had the twin effect of raising debt, and low-ering the company’s total equity. Hence FPL’s total equity fell to $14.75 billion on March 31, from $16.09 billion on Sept 30, 2020. 

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