LMIRT launches rights issue to raise S$63 million

[SINGAPORE] Lippo Malls Indonesia Retail Trust (LMIRT) launched a non-underwritten rights issue on Tuesday (Dec 9) at S$0.007 per rights unit, in a bid to raise S$63 million to pay off its existing loans and other related financial obligations.

LMIRT Management, the manager of the real estate investment trust (Reit), stated in a filing to the Singapore Exchange (SGX) that the issue price represents a 53.3 per cent discount from its closing price of S$0.015 a unit on Oct 31.

For every 100 existing units, 117 rights units would be allotted. A maximum of above 9 billion new units would be issued through this exercise.

The manager said that it obtained approval from LMIRT unitholders to undertake this rights issue at an extraordinary general meeting held on Monday.

The Reit’s sponsor, Lippo Karawaci, will buy all the rights units it is entitled to, and apply for up to 4.3 billion rights units that remain unsubscribed.

This means that it will be subscribing for around 95.2 per cent of the entire rights issue, which is worth around S$60 million, if other investors choose not to participate.

Besides using the majority of the funds raised to repay existing loans, the manager said the funds will also go towards LMIRT’s general working capital.

It intends to carry out a major asset enhancement initiative at the Cibubur Junction shopping mall in Jakarta to strengthen its market competitiveness and positioning.

It added that the rights issue would also increase the market capitalisation of LMIRT and may facilitate improvement in the trading liquidity of its units on the SGX.

“Increased market capitalisation and liquidity may potentially give LMIRT higher coverage and visibility within the research and investment community,” it added.

Units of LMIRT declined 7.1 per cent, or S$0.001, to close at S$0.013 on Tuesday.