Ascott REIT to raise S$253.7 million through an underwritten rights issue to tap future growth opportunities
Singapore, 4 November 2013 – Ascott Residence Trust (Ascott Reit) has launched an underwritten renounceable rights issue to raise approximately S$253.7 million. Existing Unitholders will be offered 253.7 million rights units at a ratio of one unit for every five units already held as at the book closure date. The rights units will be issued at S$1.00 each. This is at a discount of approximately 22.5% to the closing price of S$1.29 per unit as at 4 November 2013 and a discount of approximately 19.5% to the theoretical ex-rights price.
Mr Lim Jit Poh, Ascott Residence Trust Management Limited’s (ARTML) Chairman, said: “The rights issue will enhance Ascott Reit’s financial flexibility to tap future growth opportunities. It will also increase Ascott Reit’s trading liquidity and enhance its credit profile. Unitholders will be able to subscribe for the rights units and benefit from Ascott Reit’s future growth strategies. There is a strong pipeline of potential acquisitions from our sponsor, The Ascott Limited (Ascott), and third parties. We will continue to seek acquisition opportunities in key gateway cities in China, Japan, Malaysia, Australia and Europe. Ascott Reit will also continue to invest on refurbishing our properties to drive organic growth.”
Mr Ronald Tay, ARTML’s Chief Executive Officer, said: “For three consecutive quarters in 2013, we achieved double-digit growth in Unitholders’ distribution mainly due to strong contributions from the recently acquired quality assets. Gross proceeds from the rights issue will be used to pay down debt of approximately S$204.9 million and to fund capital expenditure and asset enhancement initiatives. We have strong support from Ascott which owns 45.3% of Ascott Reit. Ascott has undertaken to subscribe in full its allotment of rights units. The remaining rights units will be underwritten by DBS Bank Ltd. and J.P. Morgan.”
Entitled Unitholders can subscribe for the rights units from 19 November to 3 December 2013. Those who do not wish to subscribe for the rights units may sell their rights entitlements during the nil-paid rights trading period from 19 November to 27 November 2013. Unitholders may also apply for excess rights units. The new rights units are expected to list on the Singapore Stock Exchange on 12 December 2013 at 9:00 am.
 Theoretical ex-rights price = (Market capitalisation of Ascott Reit based on the closing price + gross proceeds from the rights issue) / units outstanding after the rights issue