Elite Commercial REIT is seeking to raise GBP28 million ($47.2 million) via the launch of a fully underwritten non-renounceable preferential offering.
The gross proceeds will be used to mainly repay debt and reduce the REIT’s gearing.
Under the preferential offering, the REIT will offer 103.35 million new units to its existing unitholders at a ratio of 214 preferential offering units for every existing 1,000 units. The preferential offering units will be offered at an issue price of 27 British pence, which is a discount of 10% to the volume weighted average price of 30 British pence per unit on Dec 18.
According to the REIT, its sponsors, Elite Partners Holding Pte. Ltd. and Sunway RE Capital Pte. Ltd, and substantial unitholders, Ho Lee Group Trust, Partner Reinsurance Asia Pte. Ltd., Partner Reinsurance Company Ltd. and Partner Reinsurance Europe SE, have irrevocably undertaken to subscribe for their respective allotments in full. Sunway RE Capital has further committed to subscribe for excess units in the preferential offering so that its total subscription would amount to a maximum of approximately GBP16.1 million of preferential offering units. In total, the REIT’s sponsors and substantial unitholders have undertaken to subscribe for up to a maximum of GBP24.7 million or 88.6% of the preferential offering units.
The remaining amount will be fully underwritten by CGS-CIMB Securities (Singapore) Pte. Ltd. and RHB Bank Berhad, through its Singapore branch.
“The fundraising will enhance Elite REIT’s financial flexibility. My team and I are heartened by the support and the confidence that our sponsors and substantial unitholders have in Elite Commercial REIT and its future growth potential. Supported by the resiliency of Elite Commercial REIT’s assets as critical social infrastructure in the UK, we are well-positioned to execute our growth strategy to further unlock value for our unitholders,” says Joshua Liaw, CEO of the manager.
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“The funds raised from the preferential offering will allow Elite Commercial REIT to reduce its gearing to 43.5%, creating debt headroom and financial stability during a period of near-term macroeconomic uncertainty. After the completion of the preferential offering, our immediate task in the coming year will be to refinance Elite Commercial REIT’s debt, which matures in November 2024, to prepare Elite Commercial REIT for a phase of growth when the market outlook stabilises,” he adds.
Once the net proceeds have been used to repay the REIT’s debt, Elite Commercial REIT would have a resultant debt headroom of approximately GBP58 million.
Units in Elite Commercial REIT closed at 30 British pence on Dec 18.
