Keppel DC REIT Announces S\$1 Billion Equity Fundraising to Fuel Strategic Growth

Keppel DC REIT Management Pte. Ltd. has unveiled a substantial equity fundraising exercise aimed at generating gross proceeds of approximately S\$1 billion. This strategic move is designed to bolster the company’s financial resources to support the acquisition of key assets and enhance overall financial flexibility, potentially influencing share values.

Key Highlights of the Fundraising Initiative

• The equity fundraising will involve a combination of private placements, preferential offerings, and sponsor subscriptions, collectively referred to as the “Equity Fund Raising.”
• The private placement issue price is set between S\$2.074 and S\$2.128 per new unit, while the preferential offering price ranges from S\$2.03 to S\$2.08 per unit.
• This initiative is expected to issue approximately 466.9 million new units, increasing the total number of units in issue by 27.1%.

Strategic Acquisitions and Financial Flexibility

The proceeds from this fundraising will be primarily directed towards the acquisition of interests in two data center buildings, namely Keppel DC Singapore 7 and Keppel DC Singapore 8. The acquisitions are expected to strategically position Keppel DC REIT in Asia’s top data center hub, with the added benefit of immediate distribution per unit accretion.

Impact on Shareholders and Share Prices

For shareholders, this announcement is significant as it highlights the company’s strategy to strengthen its balance sheet and pursue growth opportunities. The issuance of new units and the enlarged unitholder base are anticipated to enhance trading liquidity and potentially raise the profile of Keppel DC REIT among investors.

Moreover, the expected decrease in Keppel DC REIT’s aggregate leverage from approximately 39.7% to 33.3% suggests improved financial stability and capacity to capitalize on future growth opportunities, which could positively influence share prices.

Timeline and Regulatory Approvals

The timeline for the fundraising includes key dates such as the listing and trading of the private placement new units on 28 November 2024, and the preferential offering opening on 2 December 2024. Approval in-principle for the issuance of the new units has been obtained from the SGX-ST, with further regulatory compliance ongoing.

Commitments and Distribution Policies

Keppel DC Investment Holdings Pte. Ltd. and Keppel DC REIT Management have committed to subscribing to their respective provisional allotments, reinforcing their support for the initiative. The company’s policy of semi-annual distributions will resume following the advanced distribution related to this fundraising.

Disclaimer

This article is for informational purposes only and does not constitute financial advice. Investors should conduct their own research and consider consulting a financial advisor before making investment decisions. Past performance is not indicative of future results, and investments in securities carry risks, including the potential loss of principal.