OUE-HT announced an underwritten and renounceable rights issue of 441,901,257 new stapled securities to raise gross proceeds of ~S$238.6m. The Rights Issue would provide Stapled Security holders with the opportunity to subscribe for their pro rata entitlement to the Rights Stapled Securities at an issue price of S$0.540 per Rights Stapled Security, which is at a discount of ~29.4% to yesterday’s closing price of S$0.765.

86% of the proceeds will be used to finance the acquisition of the extension to Crowne Plaza Changi Airport. Note that we have previously projected an equity fundraising for the Crowne Plaza extension in our model; still, we put our HOLD rating and fair value of S$0.80 under review as we fine-tune our model.

Source: OCBC Research - 8 Mar 2016