KREIT – UOBKH

Gearing reduced after completion of rights issue

K-REIT received valid acceptances for a total of 382m rights units representing take-up rate of 96.3% at the close of the rights issue on 25 Apr 08. Keppel Corporation (6.3m) and Keppel Land (8.6m) has taken up the remaining 14.9m rights units that had not been subscribed in accordance with their irrevocable undertaking. Gross proceeds of S$551.7m from the rights issue will be utilised to refinance bridging loan taken for the acquisition of One Raffles Quay. Management estimated that this would reduce gearing from 53.9% to 27.7%.

Keppel Corporation will have an interest in 486m units or 75.1% stake in K-REIT, inclusive of units with Keppel Land. Keppel Land owns 282.23 units or 43.6% stake. The free float will be 24.9% after the rights issue. Liquidity should improve as free float has increase from 67.7m shares to 161.2m shares. Market capitalisation has grown to S$932m using yesterday’s closing price of S$1.44.

The rights units will start trading on Thursday, 8 May 08.