The manager of Keppel REIT says it has proposed a private placement of between 235.6 million and 242.8 million new units at an issue price of between $1.112 and $1.146 per new unit.

The total sum will total some $270.0 million in gross proceeds.

On Feb 18, the manager, DBS Bank, Citigroup Global Markets and BNP Paribas Singapore, who are the joint lead managers and underwriters, entered into a placement agreement in relation to the private placement.

Under the agreement, the joint lead managers and underwriters will subscribe and pay for the new units at the issue price should they fail to procure subscribers for the proposed private placement.

The issue price range represents a discount of between 2.7% and 5.6% to the volume weighted average price (VWAP) of the $1.1783 per unit in Keppel REIT for all trades on the SGX-ST on Feb 17.

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The price range also represents about 2.0% and 4.9% to the adjusted VWAP of $1.1689 per unit.

Of the $270.0 million it seeks to raise, the manager says $262.5 million will be used to partly fund the acquisition of Keppel Bay Tower, which was announced on Dec 23, 2020.

Another $4.0 million will go towards other fees and expenses incurred in connection with the acquisition.

A further $3.5 million will repay the REIT’s existing debts and for general corporate and working purposes.


SEE: PhillipCapital upgrades Keppel DC REIT to 'accumulate' on demand for data centres


The acquisition will be subject to the approval of the REIT’s unitholders at an extraordinary general meeting (EGM) on Feb 24.

As at June 4, 2020, the REIT had a total of 3.39 billion units. The issuance of new units through the proposed private placement does not require the prior approval of unitholders as it still falls within the 1.70 billion new units under the general mandate.

Since June 4, 2020, the manager has issued 33.5 million new units.

Following the proposed private placement, the manager intends to declare an advanced distribution for the period from Jan 1 to the day before the new units are being issued.

The distribution per existing unit is estimated to be around 0.94 cents.

The new units are expected to be issued on or around March 1.

According to the manager, the advanced distribution is made to ensure that the distributable income is distributed across its existing units to “ensure fairness” to its holders.

The next distribution will comprise the REIT’s distributable income from the day the new units are being issued, to June 30.           

Units in Keppel REIT closed flat at $1.19 on Feb 17. The manager of the REIT has requested for a trading halt on the morning of Feb 18, before its announcement.