Ascott Reit to raise funds from new units

Ascott Residence Trust is seeking to raise as much as $549.5 million through the issuance of 487.5 million new units.

Its offer information statement was lodged with the Monetary Authority of Singapore (MAS) after it secured the approval of unitholders for the equity fund-raising exercise early this month.

The exercise includes the issuance of 67.9 million new units at $1.07 to $1.11 each through a non-renounceable preferential offering. Unitholders will also receive one new unit for each 10 existing units held.

Ascott Reit remained unchanged at $1.15 at yesterday’s closing, and based on this price, the preferential offering issue price carries a discount of 3.5 percent to 7.0 percent.

In addition, Ascott Reit will issue 419.7 million new units at $1.07 to $1.13 each in a private placement to institutional and other investors.

Based on the range of the indicated issue prices, Ascott Reit could raise a total of $521.6 million to $549.5 million. The final issue prices will be determined by DBS Bank and Credit Suisse, the joint lead managers, underwriters and bookrunners, following a book-building process.

Ascott Reit is looking to secure funds to support the acquisition of 28 properties in Asia and Europe from its sponsor, The Ascott Limited, the service residence arm of CapitaLand.
 
Aside from the issuance of new units, Ascott Reit also intends to take on more debt to finance the purchase.