THE manager of Keppel DC Reit plans to launch an equity funding exercise to raise gross proceeds of about S$1 billion, it announced on Tuesday (Nov 19).
This comprises a private placement to raise around S$600 million in gross proceeds, and a non-renounceable preferential offering to raise gross proceeds of about S$300 million. It will also include an issuance of subscription units to raise about S$85 million.
The private placement units will be priced between S$2.074 and S$2.128 apiece.
This represents a discount of between 3.3 and 5.8 per cent to the volume-weighted average price (VWAP) of S$2.2017 per unit for trades done on Monday.
The manager also intends to declare an advanced distribution of between S$0.04063 and S$0.04103 per unit in connection with the private placement.
Assuming an advanced distribution of S$0.04083 per unit is deducted, the private placement issue price range represents a discount of between 1.5 and 4 per cent to an adjusted VWAP of S$2.1609 per unit – for illustrative purposes.
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Under the preferential offering, new units will be priced between S$2.03 and S$2.08 apiece. This represents a discount of between 5.5 and 7.8 per cent to the VWAP of S$2.2017 per unit.
The preferential offering issue price range represents an approximate 3.7 to 6.1 per cent discount to the adjusted VWAP of S$2.1609 per unit, for illustrative purposes.
Meanwhile, the issue price for the sponsor subscription unit will be the same as the private placement issue price.
On Tuesday, Keppel DC Reit’s manager entered into a subscription agreement with Keppel DC Investment Holdings (KDCIH), a wholly owned subsidiary of Keppel Data Centres.
Under the agreement, KDCIH will subscribe for about S$85 million worth of subscription units. The units are expected to be issued to KDCIH in early 2025.
Some S$888.2 million, or 98.7 per cent of gross proceeds from the private placement and preferential offering, will be used to finance Keppel DC Reit’s proposed acquisition of two data centres in Singapore.
Around S$85 million raised from the sponsor subscription units will be used to finance the acquisition as well.
About S$11.8 million, or 1.3 per cent of the gross proceeds from the private placement and preferential offering, will be used to pay for fees and expenses incurred by the real estate investment trust in relation with the fundraising exercises.
The remaining amount from the placement and preferential offering will be used for general corporate purposes and/or working capital purposes.
The placement launched on Tuesday and will close on Wednesday, while the preferential offering will begin on Dec 2 and close on Dec 10. The record date for the preferential offering and advanced distribution is Nov 27.
Keppel DC Reit called for a trading halt on Tuesday morning; its units ended the previous day 0.5 per cent or S$0.01 lower at S$2.19.
