ART – Lim and Tan

Equity Fund Raising Completed

• The placement tranche, comprising 419.66 mln units, has been priced at $1.08 a unit. This compares with:

– the indicative range of $1.07-1.13 as per the offer document;

– $1.15 that management had used for illustration when announcing the major deal with CapitaLand on Aug 20th; and

– $1.07 for the 1-for-10 non-renounceable preferential offering, comprising 67.858 mln units, to existing unit-holders.

• The discount to the last traded price is 6-7%.

• This: pricing and discount, is fair given:

– the 1.5x subscription rate, taking into account the 203.168 mln shares taken up by CapitaLand to maintain its percentage holding at 47.74% (3x excluding CapitaLand’s); and

– the estimated 1.6 cents DPU only the existing units would be entitled to for the period starting from July 1st to Oct 7th, the issuance date of the new units.

• The new units will commence trading on Friday Oct 8th.

• Although the news is likely “neutral” to ART’s unit price, we are maintaining our BUY call.