CapitaCommercial Trust says rights issue oversubscribed

CapitaCommercial Trust, says a total of 1,901.1 million rights units in valid acceptances and excess applications were received at the close of its rights issue on June 24. This represents about 135.4% of the total number of rights units available under the rights issue.

On May 22, CapitaCommercial Trust announced a fully-underwritten 1-for-1 renounceable rights issue of 1,403.9 million rights units at an issue price of 59 cents per rights share to raise gross proceeds of $828.3 million.

CapitaCommercial Trust says the majority of the proceeds from the rights issue will be primarily used to reduce its existing borrowings. The balance will be used for capital expenditure, asset enhancements and general corporate and working capital purposes.

With the reduced borrowings, CapitaCommercial Trust says its balance sheet will be strengthened as its gearing will be brought down to the low end of its target gearing range of 30% to 45% through property market cycles.

Lynette Leong, CEO of CapitaCommercial Trust, said, “The proceeds from the rights issue, together with CCT’s existing unencumbered asset portfolio worth $2 billion and undrawn amount of $665 million from CCT’s multicurrency medium term note program, will give CCT tremendous financial flexibility to meet future refinancing needs. Our immediate priority is to continue to drive operational performance by maintaining CCT’s high committed occupancy rate through proactive lease renewals and active leasing as well as astute cost containment.”

CapitaLand has subscribed to its entitlement of rights units to maintain a stake of 31.4% in CapitaCommercial Trust.

Source : The Edge – 30 Jun 2009

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