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<TABLE border=0 cellSpacing=0 cellPadding=0 width=452><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published October 1, 2009
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>K-Reit Asia proposes rights issue to raise $620m
80.8% of gross proceeds will be used to repay loans from Kephinance
By TEH SHI NING
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K-REIT Asia yesterday proposed a one-for-one rights issue to raise some $620 million in gross proceeds.
The proposed issue price of 93 cents per unit is at a 21.2 per cent discount to yesterday's closing price of $1.18 per unit. The issue price is also an 11.8 per cent discount to the theoretical ex-rights price of $1.06 per unit.
Chief executive Ng Hsueh Ling of K-Reit Asia Management (the manager of K-Reit Asia) said that the proposed issue of about 666.7 million units at this price would 'provide significant funding headroom and put K-Reit Asia in a strong financial position to seize future acquisition opportunities'.
The manager intends to use 80.8 per cent of the gross proceeds to repay loans from Kephinance Investment. These include a bridging loan to be drawn down for the acquisition of six strata floors of Prudential Tower.
Another 18.5 per cent of the proceeds will fund K-Reit Asia's 'potential acquisitions and asset enhancement initiatives', and for general corporate and working capital purposes.
Estimated fees and expenses incurred for the rights issue are expected to take up the remaining 0.7 per cent.
The completion of this rights issue is expected to bring K-Reit Asia's leverage down, from 33 per cent to 9.1 per cent. This implies an additional funding capacity of about $438.3 million to $647.8 million, which the manager says will enhance its financing flexibility.
In support of the rights issue, Keppel Corporation and Keppel Land Limited have undertaken to subscribe for their pro-rata entitlement of rights units, via their respective wholly owned subsidiaries. Together, they own about 75.8 per cent of K-Reit Asia's units in issue.
The remaining 24.2 per cent of rights units will be underwritten by BNP Paribas Singapore, which is acting as lead manager, underwriter and financial adviser for this rights issue.
The rights units will be equal in all aspects to the existing units in issue, and will be entitled to any distribution accrued to units from July 1 onwards.
Unitholders who do not wish to subscribe for the rights units have the option to renounce or sell their rights entitlements during the 'nil-paid' rights trading period to realise their value. Entitled unitholders may also apply for excess rights units.
An extraordinary general meeting will be convened to obtain unitholders' approval of this rights issue.
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</TD></TR><TR><TD vAlign=top width=452 colSpan=2>K-Reit Asia proposes rights issue to raise $620m
80.8% of gross proceeds will be used to repay loans from Kephinance
By TEH SHI NING
<TABLE class=storyLinks border=0 cellSpacing=4 cellPadding=1 width=136 align=right><TBODY><TR class=font10><TD width=20 align=right>
</TD><TD>Email this article</TD></TR><TR class=font10><TD width=20 align=right></TD><TD>Print article </TD></TR><TR class=font10><TD width=20 align=right></TD><TD>Feedback</TD></TR></TBODY></TABLE>K-REIT Asia yesterday proposed a one-for-one rights issue to raise some $620 million in gross proceeds.
The proposed issue price of 93 cents per unit is at a 21.2 per cent discount to yesterday's closing price of $1.18 per unit. The issue price is also an 11.8 per cent discount to the theoretical ex-rights price of $1.06 per unit.
Chief executive Ng Hsueh Ling of K-Reit Asia Management (the manager of K-Reit Asia) said that the proposed issue of about 666.7 million units at this price would 'provide significant funding headroom and put K-Reit Asia in a strong financial position to seize future acquisition opportunities'.
The manager intends to use 80.8 per cent of the gross proceeds to repay loans from Kephinance Investment. These include a bridging loan to be drawn down for the acquisition of six strata floors of Prudential Tower.
Another 18.5 per cent of the proceeds will fund K-Reit Asia's 'potential acquisitions and asset enhancement initiatives', and for general corporate and working capital purposes.
Estimated fees and expenses incurred for the rights issue are expected to take up the remaining 0.7 per cent.
The completion of this rights issue is expected to bring K-Reit Asia's leverage down, from 33 per cent to 9.1 per cent. This implies an additional funding capacity of about $438.3 million to $647.8 million, which the manager says will enhance its financing flexibility.
In support of the rights issue, Keppel Corporation and Keppel Land Limited have undertaken to subscribe for their pro-rata entitlement of rights units, via their respective wholly owned subsidiaries. Together, they own about 75.8 per cent of K-Reit Asia's units in issue.
The remaining 24.2 per cent of rights units will be underwritten by BNP Paribas Singapore, which is acting as lead manager, underwriter and financial adviser for this rights issue.
The rights units will be equal in all aspects to the existing units in issue, and will be entitled to any distribution accrued to units from July 1 onwards.
Unitholders who do not wish to subscribe for the rights units have the option to renounce or sell their rights entitlements during the 'nil-paid' rights trading period to realise their value. Entitled unitholders may also apply for excess rights units.
An extraordinary general meeting will be convened to obtain unitholders' approval of this rights issue.
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