CapitaLand Retail China Trust (CRCT) is proposing an equity fund raising, comprising an offering of new units in CRCT to fund part of the total acquisition cost of the proposed acquisition of three malls in Harbin and Changsha.

CRCT plans to raise gross proceeds of approximately S$279.4m by way of a private placement of 105,043,000 New Units at an issue price of S$1.469 per New Unit, and a pro rata and non-renounceable preferential offering of 86,871,006 New Units on the basis of 87 New Units for every 1,000 existing Units held (as at 5.00 p.m. on 13 August 2019) at an issue price of S$1.440 per New Unit to Eligible Unitholders.

The books of orders for the private placement were closed on 1 August 2019 with strong participation from new and existing institutional and other accredited investors. Opening date and last date for acceptance of the preferential offering are on 16 Aug and 26 Aug 2019 respectively.

As mentioned in our earlier report, we believe that the addition of the three malls to CRCT’s portfolio remains a strategically wise transaction. We maintain HOLD with a fair value estimate of S$1.45 for now.

Source: OCBC Research - 6 Aug 2019