ESR-LOGOS REIT (E-LOG) J91U is seeking to raise gross proceeds of around $300 million. The equity raising will be done through a private placement of between 447.8 million and 454.5 million new units and a non-renounceable preferential offering of new units.
The units from the private placement will be offered to institutional and other investors at an issue price of between 33 cents to 33.5 cents per new unit, representing a discount of 4.34% and 5.77% to the volume weighted average price (VWAP) of 35.02 cents per E-LOG unit on Feb 15.
The non-renounceable preferential offering will be offered to the REIT’s unitholders on a pro rata basis. Its issue price, which is based on a discount of 0.5 cents to the private placement issue price, represents a discount of 5.77% and 7.20% to the VWAP of 35.02 cents per E-LOG unit.
The private placement and preferential offering will raise some $150.0 million each.
According to E-LOG, the proceeds raised will be used for the funding of any potential acquisitions, redevelopments and asset enhancement initiatives (AEIs) of the properties owned by E-LOG.
The equity fundraising will also lower the REIT’s aggregate leverage to 38.0% from 41.8% as at Dec 31, 2022. It will also increase the REIT’s debt headroom to $1.1 billion based on a 45% aggregate leverage limit.
See also: Changes in ICR, leverage to come into effect immediately, with additional disclosures in March
On a pro forma basis, the REIT’s net asset value (NAV) per unit will drop to 35.9 cents from 36.4 cents before the equity fund raising.
Undertaking
ESR Group Limited, through its wholly-owned subsidiary e-Shang Infinity Cayman Limited, has irrevocably undertaken to the REIT manager that it will procure the provisional allotments of the preferential offering units corresponding to its direct interest in E-LOG in full. E-Shang Infinity has 530.9 million units or 7.89% of E-LOG’s total units. The total number of preferential offering units applied for by e-Shang Infinity does not exceed $95.0 million.
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At the same time, LOGOS Property Group, through its wholly-owned subsidiary LOGOS Units No. 1, has irrevocably undertaken to the REIT manager that it will pay for LOGOS Units No. 1’s total provisional allotments of the preferential offering units corresponding to its direct interest in E-LOG in full.
LOGOS Units No. 1 has 333.5 million units, or 4.96% of the total units in E-LOG as at Feb 16. The total number of preferential offering units applied for by LOGOS Units No. 1 does not exceed $55.0 million.
e-Shang Infinity and LOGOS Units No. 1 will rank last in the allocation of excess preferential offering units, says the REIT manager.
The REIT manager, Citigroup Global Markets Singapore, DBS Bank and United Overseas Bank (UOB) are the joint bookrunners and underwriters for the private placement.
Units in E-LOG closed at 35 cents on Feb 15.
