Ascott REIT successfully raises S$150 million through private placement to capture growth opportunities
Singapore, 29 January 2013 – Ascott Residence Trust (Ascott Reit) has successfully raised gross proceeds of S$150 million through a placement (Private Placement) of 114.9 million New Units at an issue price of S$1.305 per New Unit.
Mr Ronald Tay, Ascott Residence Trust Management Limited’s (ARTML) Chief Executive Officer, said: “This equity placement will allow us to increase our financial capacity to fund potential future acquisitions. This will in turn enable us to further grow and enhance Ascott Reit’s portfolio to boost Unitholders’ returns. We remain confident in the markets where we operate in as we continue to grow the business and enhance value for Unitholders.”
The proceeds will be primarily used to fund potential future acquisitions, finance asset enhancement initiatives, repay existing debt and for general working capital. Assuming that the net proceeds are used to repay existing debts, the Private Placement is expected to reduce Ascott Reit’s aggregate leverage from 40.1% to 34.9%. With the increased debt headroom post the Private Placement, Ascott Reit will be able to act more expeditiously when pursuing (i) acquisition opportunities and/or (ii) asset enhancement initiatives, both with the objective of delivering additional value for Unitholders.
The issue price of S$1.305 per New Unit represents a discount of approximately 4.6% to Ascott Reit’s adjusted volume weighted price[1] of S$1.3685 per Unit, for trades done on the Singapore Exchange Securities Trading Limited (SGX-ST) on 28 January 2013.
The volume weighted price has been adjusted by 4.85 cents, being Ascott Reit’s semi-annual distribution[2] for the period from 1 July 2012 to 31 December 2012 and the midpoint of the estimated advanced distribution for the period from 1 January 2013 to 5 February 2013. The New Units are not entitled to the abovementioned distributions.
The Private Placement will increase Ascott Reit’s free float from 51% to 55% and this is expected to improve the level of trading liquidity of its Units. The successful Private Placement has enabled Ascott Reit to enlarge its institutional investor base as it received participation from existing and new institutional investors from Asia, the United States and Europe.
Mr Tay added: “With a higher profile among global investors, and an increase in market capitalisation, Ascott Reit is well-positioned for future growth. The response from our existing and new investors for the Private Placement is a testament of their confidence in Ascott Reit. We would like to thank all our investors for their support.”
Mr Tay added: “With a higher profile among global investors, and an increase in market capitalisation, Ascott Reit is well-positioned for future growth. The response from our existing and new investors for the Private Placement is a testament of their confidence in Ascott Reit. We would like to thank all our investors for their support.”
Advanced Distribution
In conjunction with the Private Placement, ARTML announced an Advanced Distribution of between 0.59 cents and 0.63 cents per Unit to existing Unitholders. The Advanced Distribution is for Ascott Reit’s distributable income from 1 January 2013 to 5 February 2013, which is the day immediately prior to the date on which the New Units will be issued.
The New Units, which are expected to be issued on 6 February 2013, will not be entitled to the Advanced Distribution.
The next distribution will be for Ascott Reit’s distributable income from 6 February 2013 to 30 June 2013. Semi-annual distributions will resume thereafter.
The Book Closure Date for the Advanced Distribution is 5 February 2013 at 5:00 p.m. and the Advanced Distribution will be paid on or around 5 April 2013.
Listing of New Units
The trading of the New Units on the SGX-ST is currently expected to commence at 9:00 a.m on 6 February 2013.
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[1] The adjusted volume weighted average price, for illustrative purposes only, is computed based on the volume weighted average price of all trades in the Units on the SGX-ST on 28 January 2013 (being the market day on which the Placement Agreement was signed) of S$ 1.3685 per Unit and subtracting, for illustrative purposes only, (i) the declared distribution in respect of the period from 1 July 2012 to 31 December 2012 (the "Semi-Annual Distribution") and (ii) the estimated Advanced Distribution of approximately 0.61 cents per Unit (being the midpoint of the estimated Advanced Distribution). This amount is only an estimate based on information currently available to the Manager as the actual Advanced Distribution may differ.
[2] Semi-annual distribution of 4.238 cents per Unit