ART – BT

Ascott Reit to raise up to $550m from new units

ASCOTT Residence Trust (Ascott Reit) is looking to raise up to $549.5 million by issuing 487.5 million new units.

It lodged its offer information statement with the Monetary Authority of Singapore yesterday, after getting unitholders’ approval for the equity fund-raising exercise early this month.

There are two parts to the exercise. Ascott Reit will issue 67.9 million new units at $1.07-$1.11 apiece through a non-renounceable preferential offering. Unitholders stand to receive one new unit for every 10 existing ones held.

The trust closed unchanged at $1.15 yesterday. Based on this price, the preferential offering issue price carries a discount of 3.5-7.0 per cent.

Ascott Reit will also issue 419.7 million new units at $1.07-1.13 each in a private placement to institutional and other investors.

Based on the range of issue prices indicated, Ascott Reit could raise $521.6 million to $549.5 million in total. Credit Suisse and DBS Bank, the joint lead managers, bookrunners and underwriters, will determine the final issue prices after a book-building process.

Ascott Reit is seeking funds to support the purchase of 28 properties in Europe and Asia from its sponsor, The Ascott Limited. The latter is CapitaLand’s service residence arm.

Apart from issuing new units, Ascott Reit also plans to take on more debt to fund the acquisition.