CapitaLand Retail China Trust (CRCT) announced on Nov 17, that it is seeking to raise some $300 million through an equity fund raising.

The sum will be raised through a private placement of 184,410,000 new units at an issue price of between $1.193 and $1.236 per new unit, as well as a pro rata and non-renounceable preferential offering of up to 68,997,855 new units to eligible unitholders at an issue price of $1.17 and $1.21 per unit.

The private placement will raise gross proceeds of around $220 million. It is also subject to an upsize option being exercised to issue up to 20,956,000 additional new units to raise additional proceeds of up to $25 million.

The non-renounceable preferential offering seeks to raise gross proceeds of some $80.0 million.

The price range for the private placement represents approximately 3.4% and 6.8% to the closing price of $1.28 per unit of all trades on the SGX-ST on Nov 16, up to the time the agreement was signed on Nov 17.

The price range also represents a 1.3% and 4.8% discount to the adjusted closing price of $1.2525 per unit, and 4.1% and 7.5% to the volume weighted average price (VWAP) of $1.2891 per unit on the SGX-ST on Nov 16. The price represents some 2.0% and 5.4% to the adjusted VWAP of $1.2616 per unit.

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The preferential offering issue price range represents a discount of around 5.5% and 8.6% to the closing price of $1.28 per unit, and approximately 3.4% and 6.6% to the adjusted last close of $1.2525 per unit.

The preferential offering issue price range also represents a discount of 6.1% and 9.2% to the VWAP of $1.2891 per unit and about 4.1% and 7.3% to the adjusted VWAP of $1.2616 per unit.

The issue price per new unit for the private placement will be determined by CRCT’s manager and joint global co-ordinators and bookrunners, Citigroup, DBS and HSBC Singapore.

In relation to the equity fund raising, Retail Crown and CapitaLand Retail China Trust Management Limited (CRCTML), in its own capacity, have each provided an irrevocable undertaking to the manager. Under the irrevocable undertaking, both Retail Crown and CRCTML will subscribe and pay in full for its provisional allotment of the units of about 19.09% of the pro rata units.

In addition, both will subscribe and pay in full for the number of additional preferential offering units of about 10.82% CapitaLand Integrated Commercial Trust’s (CICT) pro rata units.

The manager of CRCT says it intends to use the net proceeds from the equity fund raising to finance part of the total cost of the proposed acquisition of the respective interests in the companies which hold the Ascendas Xinsu Portfolio, Ascendas Innovation Towers, Ascendas Innovation Hub, Singapore-Hangzhou Science and Technology Park Phase I and II and Rock Square, which comes up to some $822.4 million.

Of the gross proceeds of about $300.7 million, the manager intends to use about $293.9 million to finance part of the total acquisition cost, and $6.8 million to pay the fees and expenses incurred by the acquisition and equity fund raising.

The manager may also use the proceeds to repay existing debt and fund capital expenditures for CRCT.

As at 10.44am, units in CRCT are trading flat at $1.28.

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