CapitaLand paying for Ascendas-Singbridge with a 50:50 mix of cash and shares avoids over-gearing the company or issuing stock at too steep of a discount, said CapitaLand’s president and group CEO Lee Chee Koon.
CapitaLand is buying Ascendas-Singbridge from Temasek Holdings in a deal worth S$11 billion, which includes debt owed by Ascendas-Singbridge and a S$6 billion consideration to parent company Temasek.
At a CapitaLand dialogue session with Securities Investors Association (Singapore) (SIAS) members on Monday evening, Mr Lee said: “We contemplated whether to borrow the full S$6 billion, but if we did that, gearing would be about 1.0x. As a company, we want to be prudent and so we looked at permutations. A 50:50 mix between cash and shares is one we are most comfortable with.”
He said the group could have explored a rights issue to get money from shareholders for the remaining 50 per cent, but it would have had to do so at a 20 to 25 per cent discount to the traded price.
The two-hour town hall meeting, which included CapitaLand group CFO Andrew Lim and SIAS president and CEO David Gerald, covered topics including market sentiment post-announcement of CapitaLand’s proposed acquisition and the group’s balance sheet.