Keppel DC REIT’s Bold Move: \$1.1 Billion Fund Raising Initiative Amidst High Demand

Keppel DC REIT has announced the successful completion of its equity fund-raising initiative, amassing approximately S\$1.1 billion through a combination of a Private Placement, Preferential Offering, and Sponsor Subscription. This strategic financial maneuver, which saw the Private Placement oversubscribed 3.4 times, highlights significant investor interest and confidence in Keppel DC REIT’s future prospects.

Key Highlights

• Private Placement Success: The Private Placement was remarkably successful, being 3.4 times covered with the Upsize Option and 4.0 times without it. This strong demand enabled Keppel DC REIT to increase the size of the Equity Fund Raising by S\$100 million, raising the total to approximately S\$1,086.3 million.
• Issue Prices: The issue price for Private Placement New Units is set at S\$2.090, while the Preferential Offering New Units are priced at S\$2.03 each. Both prices reflect discounts to the volume weighted average price (VWAP) of S\$2.2017 per Unit, potentially affecting short-term share value perceptions.
• Use of Funds: Approximately S\$945.2 million, representing 94.4% of the proceeds, will be used to partially finance the Proposed Shares and Notes Transactions. Additionally, S\$43.1 million will go toward debt repayment and capital enhancements, with S\$13 million allocated for expenses related to the fundraising.
• Authority and Listing: The issuance of new units falls under the General Mandate, allowing the manager to issue new units without prior unitholder approval. Trading for the new units is expected to commence on 28 November 2024.

Shareholder Considerations

Shareholders should be aware that the fund-raising initiative, while indicative of strong investor interest, involves discounts that might influence the immediate market value of existing shares. Additionally, the potential use of funds for future acquisitions and debt repayment may impact the company’s financial stability and growth trajectory.

Forward-Looking Statements

This announcement contains forward-looking statements, including but not limited to expectations regarding market conditions and the intended use of proceeds. These statements involve risks and uncertainties, and actual outcomes may differ materially from those anticipated.

Important Disclaimer

This article is for informational purposes only and does not constitute financial advice. Readers are encouraged to perform their own research and consult with a financial advisor before making any investment decisions. The value of investments can go up or down, and past performance is not indicative of future results.