Frasers Centrepoint Trust’s Bold S\$400M Equity Raise: A Game Changer for Share Prices?

Frasers Centrepoint Trust (FCT) is about to shake up the market with an aggressive equity fundraising initiative designed to raise gross proceeds of no less than S\$400 million. The dual strategy involves a private placement targeted at institutional, accredited, and expert investors, along with a non-renounceable preferential offering designated exclusively for existing unitholders. This move is expected to have significant price implications and could substantially influence share values.

Key Highlights and Details

• Equity Fundraising Structure:
  • Private Placement: Targeting gross proceeds of at least S\$200 million by issuing New Units (Private Placement Units) at an issue price between S\$2.070 and S\$2.113.
  • Preferential Offering: Aimed at raising approximately S\$200 million, this offering will be available to existing unitholders on a pro rata basis at an issue price between S\$2.030 and S\$2.070.
• Unit Ranking and Distribution:
  • Private Placement Units will rank pari passu with the current units except with regard to the cumulative distribution and eligibility to participate in the preferential offering.
  • Preferential Offering Units will also rank pari passu with the existing units but are ineligible for the cumulative distribution; however, they entitle holders to subsequent distributions.
• Cumulative Distribution:
  • The estimated distribution per Existing Unit is between 6.13 and 6.17 Singapore cents. This distribution covers income accrued up to the day immediately before the issuance of the Private Placement Units, ensuring fairness to long-term investors.
  • The payment of this distribution is scheduled for around Friday, 30 May 2025.
• Important Record Dates:
  • Both the preferential offering record date and the cumulative distribution record date are set for 5.00 p.m. on Thursday, 3 April 2025.
• Listing and Trading:
  • Private Placement Units are expected to begin trading on Friday, 4 April 2025 at 9.00 a.m.
  • Preferential Offering Units are slated for listing on Friday, 25 April 2025 at 9.00 a.m.
• Tax Implications:
  • Gross distributions will be received by certain unitholder categories such as individual investors (if not deriving income through a partnership or professional business), companies tax-resident in Singapore, and other local bodies.
  • Qualifying foreign non-individual investors and non-resident foreign funds will have tax deducted at a concessional rate of 10% subject to submission of the appropriate tax declaration forms.
  • Failure to submit required declarations will result in tax deductions at a higher rate of 17%.
• Key Dates to Note:
  • Private Placement Launch: Tuesday, 25 March 2025
  • Close of Private Placement: Wednesday, 26 March 2025
  • Last Date for Cum Distribution Quoted Units: Tuesday, 1 April 2025
  • Preferential Offering Record Date & Cumulative Distribution Record Date: Thursday, 3 April 2025 at 5.00 p.m.
  • Opening for Preferential Offering: Tuesday, 8 April 2025 at 9.00 a.m.
  • Deadline for Application and Payment for Preferential Offering: Wednesday, 16 April 2025 at 5.30 p.m. (9.30 p.m. for electronic applications)
  • Next Distribution Period: Distributable income from 4 April 2025 to 30 September 2025
• Additional Insights:
  • The equity raising strategy has been structured to ensure that the income accrued by FCT is distributed fairly among existing unitholders, a factor that could bolster investor confidence while also attracting new capital.
  • This aggressive capital raising is a potential catalyst to move share prices, given the substantial amounts being raised and the detailed planning around the listing and distribution schedule.

Implications for Shareholders

This fundraising initiative is particularly noteworthy for existing unitholders as it directly impacts unit pricing, the distribution of accumulated income, and the overall market perception of the Trust. The locking of unit prices within a narrow range for both offerings and the clear delineation of distribution rights serve to reassure investors of the Trust’s commitment to fairness. However, the split in benefits—where preferential offering units for existing shareholders do not receive the cumulative distribution component—could stir market speculation and affect share valuations in the short term.

Conclusion

Frasers Centrepoint Trust’s dual-track equity fund raising is one of the most significant moves in recent times, aimed at bolstering capital while maintaining shareholder value. With tight timelines, explicit pricing bands, and clear tax and distribution guidelines, this announcement is likely to be closely monitored by market participants. The strategic approach in balancing new investor influx with preferential treatment for existing unitholders presents both opportunities and challenges that could lead to considerable share price movement.

Disclaimer: This article is for informational purposes only and should not be construed as financial advice. Market prices are subject to fluctuations, and investors should perform their own due diligence before making any investment decisions.