SINGAPORE (Sept 16): Keppel DC REIT has announced an equity fund raising exercise to raise gross proceeds of $473.8 million to help fund its recently proposed acquisitions of two data centres

In an SGX filing on Monday before market open, the manager of Keppel DC REIT says the proposed equity fund raising will comprise a private placement and a pro rata and non-renounceable preferential offering.

First, Keppel DC REIT will issue 135 million new units in a private placement at an issue price of between $1.703 and $1.744 each. This will translate into gross proceeds between $229.9 million and $235.4 million.

The private placement issue range represents a discount of between 2.5% and 4.8% to the volume weighted average price (VWAP) for the preceding market day on Sept 13, up to the time the underwriting agreement was signed on Sept 16.

The offer of new units under the private placement will be made to accredited, institutional and other investors.

Next, a preferential offering of new units will be made available to unitholders at an issue price of between $1.67 and $1.71 per unit, to raise gross proceeds of approximately $238.4 million to $243.9 million.

The preferential offering issue price range represents a discount of between 4.4% and 6.6% to the VWAP.

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

Some 92.6% of the proceeds, or some $438.6 million, will be used to partially fund the recently proposed acquisitions of 99.0% interest in Keppel DC Singapore 4 and 100.0% interest in 1-Net North Data Centre.

See: Keppel DC REIT acquiring two data centres for $585 mil; launches equity fund raising

The manager says the acquisitions are distribution per unit accretive, and will help the REIT strengthen its foothold in Singapore.

It adds that the acquisitions will strengthen the income resilience and stability of the REIT's portfolio.

Of the remaining gross proceeds, 5.6%, or $26.7 million, will be used to fund capital expenditure, while 1.8%, or $8.5 million, will be used to estimated fees and expenses incurred by the REIT in connection with the equity fund raising.

Applications for placement units are expected to open at 9am on Sept 27 and close at 5pm on Oct 7, while the books closure date for the preferential offering will be at 5pm on Sept 24.

Keppel DC Investment Holdings and Keppel DC REIT Management, which together hold around 25.21% of the existing units in Keppel DC REIT, have each provided an undertaking to the manager that it will accept, subscribe and pay in full for, its provisional allotment of new units under the preferential offering.

DBS Bank, Citigroup Global Markets and Credit Suisse Singapore have been appointed as the joint bookrunners, and will also be joint underwriters for the fund raising together with CLSA Singapore.

Keppel DC REIT had called for a trading before market open on Monday. Units in the counter last closed at $1.80 on Friday.