PETALING JAYA: Sunway Real Estate Investment Trust (Sunway REIT) has successfully raised gross proceeds of RM710mil through the placing out of 479.7 million new units in line with the private placement exercise at an issue price of RM1.48 per unit.
The proceeds from the private placement have been earmarked to mainly fund the acquisition of The Pinnacle Sunway and the expansion of Sunway Carnival Shopping Mall.
In a statement yesterday, manager Sunway Reit Management Sdn Bhd said the private placement was fully subscribed with encouraging demand.
It was anchored by support from both domestic institutional investors and new foreign institutional investors.
Sunway Reit Management CEO Datuk Jeffrey Ng (pic) said, “Despite the tough market conditions, the encouraging support from investors reinforces investors’ confidence towards Sunway REIT’s medium to long-term growth trajectory.
“With the expected completion of the private placement, Sunway REIT’s capital base will be strengthened, giving us flexibility to pursue new yield accretive acquisitions and asset enhancement initiatives, in line with our TRANSCEND 2025 strategic direction.
“Sunway REIT’s gearing is also expected to reduce to 37.6% from 40.7% on a pro-forma basis as at June 30,2020.”
The success of the transaction amid challenging market conditions and announcement of conditional movement control order (CMCO) in the midst of the book-building period, serves as a testament to investors’ confidence in Sunway REIT’s track record and growth trajectory.
Pursuant to the issuance of the new units, the total number of issued units in Sunway REIT will increase to 3.42 billion units.
As such, Sunway REIT’s market capitalisation will expand correspondingly from RM4.5bil to RM5.2bil, based on the market closing price of RM1.52 per unit as at Oct 12,2020.
The placement issue price of RM1.48 per placement unit, represented a 2.8% discount to the five-day, volume-weighted average price of Sunway REIT units up to and including Oct 9,2020 of RM1.522.
The private placement was jointly managed by Credit Suisse (Singapore) Ltd, RHB Investment Bank Bhd and Maybank Investment Bank Bhd.
Sunway REIT ended the day 1.32% or two sen lower at RM1.50, with a market capitalisation of RM4.42bil.
In June, Sunway Management said it was acquiring The Pinnacle Sunway for RM450mil, which will mark the 10th property addition to Sunway REIT’s asset portfolio. Following the completion of the acquirision, Sunway REIT’s property value rose to RM8.5bil.