The manager of ARA LOGOS Logistics Trust says it has proposed to issue about 90.5 million new units in ALOG at an issue price of 55.25 cents per new unit to raise gross proceeds of approximately $50.0 million.
The size of the private placement may be increased, if any, which will be announced at the close of the books of the private placement.
The manager, on Nov 2, entered into a placement agreement with Citigroup Global Markets, Credit Suisse and DBS Bank, who are also the underwriters in relation to the private placement.
The underwriters have been appointed to procure subscribers for the new units at the issue price stated per new unit.
The issue price of 55.25 cents represents a discount of 7.2% to the volume weighted average price (VWAP) of 59.52 cents per unit and 3.8% to the adjusted VWAP of 57.43 cents per unit in ALOG for trades done on the last full market day on Oct 30 and up to the time the agreement was signed on Nov 2.
The issue price will be determined by the manager and the underwriters following a book-building process.
The manager says it expects to raise a total of $100 million of gross proceeds from the private placement and the preferential offering.
Of the $50.0 million, the manager intends to allocate some $49.25 million to partially finance the acquisition of five logistics properties located in Australia and the fund investment in 49.5% interest in the new LAIVS trust. The remaining $0.75 million will pay for the underwriting, selling and management fee as well as other fees incurred in connection with the private placement.
The proposed acquisitions and fund investments will be subject to the approval of unitholders, which will be sought at an extraordinary general meeting (EGM).
In the event that ALOG does not proceed with the proposed acquisitions and fund investments, the proceeds from the private placement will be used to fund ongoing and future investments, as well as pare down debt.
The number of new units represents an increase of some 8.3% of the total number of units currently in issue.
Units in ALOG closed flat at 59.5 cents on Nov 2.
See also: ALOG's proposed transaction not immediately accretive to DPU and NAV