Fortune REIT says rights issue oversubscribed by 15.8%

Fortune Real Estate Investment Trust says it has received valid acceptances and excess applications for a total of 955,123,404 rights units at the close of Fortune REIT’s rights issue on Oct 7.

This represents 115.8% of the total number of rights units available under the rights issue.

The manager had on Aug 24 announced the fully underwritten one-for-one renounceable rights issue of 824,879,427 rights units at an issue price of HK$2.29 per right unit to raise gross proceeds of HK$1,889 million ($341 million).

The majority of the proceeds from the rights issue will be used for the acquisition of three retail properties in Hong Kong, namely Metro Town, Caribbean Bazaar and Hampton Loft. The balance will be used for capital expenditure, asset enhancement and general corporate and working capital purposes.

In support of the rights issue and to demonstrate its commitment as sponsor of Fortune REIT, Cheung Kong (Holdings) has subscribed for its entitlement of rights units to maintain its deemed interest of 31.9% in Fortune REIT.

The Fortune REIT rights issue was fully underwritten by joint lead managers and underwriters, Cazenove & Co. (Singapore) and DBS Bank.

Fortune REIT says it remains committed to paying out 100% of its distributable income for the financial year ending Dec 31, 2009.

Source : The Edge – 12 Oct 2009

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