K-REIT to raise S$620m through one-for-one rights issue

K-REIT Asia is planning to raise S$620 million through a one-for-one rights issue.

It is offering about 667 million rights units at 93 cents each, representing a 21.2 per cent discount to K-REIT Asia’s closing price of S$1.18 per unit on September 30.

K-REIT Asia said it intends to use about 80 per cent of the gross proceeds to repay borrowings provided by Kephinance Investment. This includes a bridging loan to be drawn down for the acquisition of six strata floors of Prudential Tower.

The remaining proceeds are to be used to fund potential acquisitions and asset enhancement initiatives, as well as general corporate and working capital purposes.

When the rights issue is completed, K-REIT Asia said its aggregate leverage is expected to decrease from 33 per cent to 9.1 per cent.

Keppel Corporation and Keppel Land, which together own about 75.8 per cent of K-REIT Asia’s units, have undertaken to subscribe for their entitlement of rights units.

The remaining 24.2 per cent of rights units will be underwritten by BNP Paribas, Singapore Branch, which is acting as lead manager, underwriter and financial adviser for the rights issue.

An extraordinary general meeting is expected to be convened to approve the rights issue.

Source : Channel NewsAsia – 30 Sep 2009

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