The manager of Lendlease Global Commercial REIT (LREIT) is seeking to raise $573.8 million through a private placement of 448.3 million new units.
The new units will be issued at an issue price range of between 72.5 cents to 74 cents per new unit, or 7.1% to the volume weighted average price (VWAP) of the trades done on March 21.
The private placement will also be subject to an upsize option of around 103.4 million additional new units to raise proceeds of around $75 million.
In addition, the REIT manager announced that it will be launching a non-renounceable preferential offering of 345,577,449 new units to its existing unitholders who are eligible. This will be done on the basis of 29 new units for every 100 existing units in LREIT at an issue price of 72 cents per unit.
The preferential offering issue price represents a discount of 9.6% to the VWAP of 79.64 cents per unit.
The non-renounceable preferential offering will raise gross proceeds of around $248.8 million.
See also: CICT's manager proposes to acquire ION Orchard at $1.85 billion, subject to EGM
Of the $573.8 million, about $564.9 million will partly finance the proposed acquisition of the remaining interest in Jem. The total cost of the acquisition stands around $2.02 billion.
The remaining $8.9 million will go to the fees in relation to the equity fund raising.
According to the manager, it has obtained the approval of unitholders for the proposed issue of up to 1.27 billion new units, which is 6.2% more than the 1.19 billion units that already exist in LREIT.
See also: CICT's manager proposes to acquire ION Orchard at $1.85 billion, subject to EGM
“For the avoidance of doubt, the manager will not be relying on the general mandate that was obtained by the manager from unitholders at the annual general meeting of unitholders held on Oct 25, 2021 to issue the new units,” reads the statement.
LREIT’s sponsor, Lendlease Trust, has irrevocably undertaken to the manager, as well as the joint global co-ordinators and bookrunners on Feb 14, 2022, that it will accept, subscribe, and pay in full for the relevant entities’ total provisional allotment of the preferential offering units in relation to the initial sponsor units.
The sponsor currently holds and indirect interest of 316.17 million units in LREIT, or 26.53% of the total sum.
Citigroup, DBS Bank, OCBC and UOB were appointed as the joint bookrunners for the equity fund raising.
Advanced distribution
Further to the announcement, the REIT manager says it intends to declare an advanced distribution for the period from Jan 1 to the date immediately prior to the date on which the new units are issued under the private placement.
The quantum of distribution per unit (DPU) under the advanced distribution is currently estimated to be between 1 to 1.2 cents. A further announcement on the DPU will be made by the manager. The new units are expected to be issued on or around March 31.
Units in LREIT last traded at 79.5 cents before its trading halt on the morning of March 22.
