The managers of Mapletree Commercial Trust (MCT) and Mapletree North Asia Commercial Trust (MNACT) have given MNACT unitholders the added option of receiving cash only in conjunction with the proposed merger of both REITs.
The new option will see MNACT unitholders receiving the full scheme consideration of $1.1949 in cash only.
The new option adds to the existing options of a scrip-only consideration and cash- and scrip consideration for MNACT unitholders.
The consideration of $1.1949 remains unchanged. The amount is equivalent to the net asset value (NAV) per MNACT unit as at Sept 30, 2021.
The inclusion of the cash-only consideration will result in an additional cash requirement of up to $2.2 billion. The amount will be funded via a preferential offering to MCT unitholders at the issue price of $2.0039 per MCT unit, and fully backed by the REIT’s sponsor, Mapletree Investments.
The move means that there will be no incremental debt financing requirements or impact on the total leverage of MCT and the merged entity, which will be called Mapletree Pan Asia Commercial Trust (MPACT).
The new capital to be raised is in addition to the $417.3 million to be funded through the issuance of perpetual securities and, or debt funding, which were required under the original terms of the trust scheme.
In addition to its full backing, where Mapletree Investments will subscribe for the preferential offering for an amount of up to $2.2 billion, the sponsor has also agreed to a voluntary six-month lock-up of its unitholdings in the merged entity following the completion of the trust scheme or the preferential offering.
According to both managers, the addition of the cash-only consideration gives MNACT unitholders greater flexibility to elect an option that best suits their investment needs.
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The decision to include the cash-only consideration came after a request from the MNACT manager in light of the current market considerations and feedback from the REIT’s unitholders.
“The cash-Only Consideration is advantageous to MNACT unitholders as it provides greater flexibility in terms of the form of the scheme consideration receivable in respect of the merger. Furthermore, it safeguards the interests of MCT Unitholders as the pro forma financial effects of the merger remain unchanged from the original terms of the trust scheme,” reads the joint statement put out by both managers on March 21.
Sharon Lim, CEO of MCT’s manager says, “The addition of the alternative cash-only consideration to MNACT unitholders gives them complete flexibility in electing the form of scheme consideration. This does not change the merger’s previous terms and we continue to believe in its strategic and financial rationale.”
“To drive the future growth of the merged entity, we have charted a tailored ‘Recharge, Reconstitute, Refocus and Resilience’ or ‘4R’ asset and capital management strategy.
“As a definite show of its commitment to MPACT and its future prospects, Mapletree Investments will be fully backing MCT’s $2.2 billion preferential offering. We are grateful for Mapletree Investments’ unwavering support, and we are now more ready than ever to embark on this transformative merger,” Lim adds.
Cindy Chow, CEO of MNACT says, “We continue to believe in the strategic rationale for the merger and the benefits to MNACT unitholders who now have three scheme consideration options.”
“MNACT unitholders can choose to remain invested in a larger and more diversified platform that has a compelling growth strategy ahead through the scrip-only consideration and the cash-and-scrip consideration. The alternative cash-only Consideration will provide additional optionality and enhanced flexibility to MNACT Unitholders who wish to fully realise their investment, giving higher certainty amidst prevailing market conditions,” Chow adds.
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Finally, Hiew Yoon Khong, the group CEO of Mapletree Investments says, “MIPL’s commitment to fully subscribe for the $2.2 billion preferential offering at the announced issue price of S$2.0039 per MCT unit demonstrates our support for the merger, as well as our strong conviction in the MCT manager’s ability to drive long-term value, and both organic as well as inorganic growth to the unitholders of MPACT.”
“The merger represents an exceptional opportunity in terms of unlocking value for unitholders through the creation of a flagship Asian commercial REIT. As the sponsor of both MCT and MNACT with a meaningful long term ownership stake, we are strongly aligned with unitholders in the success and growth of MPACT,” Hiew adds.
MCT and MNACT, on Dec 31, 2021, announced its proposed merger to form a new REIT, which will be Mapletree’s flagship commercial REIT positioned to be the proxy to key gateway markets of Asia.
Upon the completion of the merger, the new combined REIT will have a market capitalisation of around $10.5 billion, making it one of the top 10 largest REITs in Asia.
Units in MCT closed 1 cent higher or 0.532% up at $1.89 on March 18, while units in MNACT closed flat at $1.12 on the same day.
Photo: MNACT
