CDL Hospitality Trusts is placing out new stapled securities to raise net proceeds of up to S$196 million.
The trust said the issue price will range between S$1.71 and S$1.77 per stapled security, with the final price fixed after a book-building exercise.
This represents a discount of 6.3 per cent to 9.4 per cent to the counter’s volume weighted average price on Monday.
The placement aims to raise S$150 million with an upsize option of another S$50 million.
CDL Hospitality Trusts said it intends to use the proceeds to repay loans and for general corporate or working capital.
The trust said the placement will allow it to strengthen its balance sheet and give it the financial muscle for acquisitions.
Vincent Yeo, CEO of the manager of CDL Hospitality Real Estate Investment Trust (H-REIT) said, “This private placement allows us to significantly strengthen our balance sheet, boosting our debt headroom and putting us into a better position to move quickly as and when acquisition opportunities may arise.
“With the recovery of the hospitality sector, we believe there will be opportunities to make strategic value-accretive asset acquisitions that can further propel our growth.”
DBS Bank is the sole financial adviser on the deal, while DBS Bank and Standard Chartered are the joint lead managers and underwriters for the private placement.
Source : Channel NewsAsia – 22 Jun 2010