KUALA LUMPUR: Sunway Real Estate Investment Trust's (Sunway REIT) private placement of 214.76 million new units to raise RM320mil was oversubscribed by 2.8 times.
Its manager, Sunway REIT Management Sdn Bhd said the proceeds would be used to repay the short-term facility drawn down to fund the purchase of the land and building of Sunway Medical Centre and defray related expenses.
"The private placement was 2.8 times subscribed and saw strong interest from new and existing investors both domestically and internationally, weighted towards long only investors. The private placement will assist to increase the absolute size of the free float and facilitate improved liquidity," said Sunway REIT Management.
The corporate exercise would create 214.76 million new units at RM1.49 per unit, or 7.37% of the enlarged fund size of 2.915 billion units.
Upon completion of the issuance of the new units, Sunway REIT's market capitalisation will increase from RM4.16bil to RM4.49bil based on the market closing price of RM1.54 on Feb 4.
Sunway REIT Management said the issuance price for the new units of RM1.49 per unit was at the top of the launch range of RM1.46 to RM1.49 per unit.
The issuance price represents a 2.9% discount to the five days volume weighted average price (VWAP) as of Feb 4 or a 0.9% discount to the VWAP, adjusted for the already announced distributions of 3.16 sen per unit.
"Sunway REIT's gearing is expected to ease to 31.5% from 37.7% as at Dec 31, 2012 following the repayment of the short-term facility. This will provide further headroom for future acquisitions," it said.