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The Business Times - AIMS AMP ups size of private placement

The Business Times  April 18, 2013

By Carine lee

AIMS AMP Capital Industrial Reit has raised the size of its private placement of new units from $100 million to $110 million because of strong demand.

The book of orders was closed yesterday, the same day that it launched the private placement, after it was 3.5 times subscribed.

The price of the new units was fixed at $1.60 apiece after an earlier indication of between $1.575 and $1.625. The increased size of the placement is expected to raise net proceeds of about $107 million.

The issue price, determined after an accelerated book-building process, represents a discount of about 3.2 per cent to an adjusted volume weighted average price of $1.6524 for trades done.

AIMS AMP Capital Industrial Reit Management, the manager of the trust, said the proceeds will be mostly used to fund development projects, which it believes will further enhance the quality of the Reit’s portfolio and distributable income to unit holders.

About 75 percent of the gross proceeds will go towards partially funding the phase three development of 20 Gul Way and the redevelopment of 103 Defu Lane 10.

The Gul Way plot is expected to be one of the largest integrated ramp-up logistics warehouses in Singapore with a gross floor area in excess of 1.65 million square feet, while the Defu Lane redevelopment will transform the property from a two-storey warehouse and adjoining three-storey building into a modern six-storey industrial facility with a gross floor area of 202,901 square feet.

The manager said the projects are expected to be financed progressively over the next 15 months and it may use the proceeds to partially repay outstanding borrowings in the interim.

“Once the development projects are completed, the manager expects to derive attractive yields from the properties which would enhance distributable income to unit holders,” it added.

In addition, 22 percent of the gross proceeds will be used to fund potential acquisitions in the future, asset enhancement initiatives and other redevelopment opportunities.

About 3 percent will be used to pay fees and expenses incurred in connection with the placement. 

The Reit is also looking at a strengthened balance sheet, capital structure and enhance financial flexibility after the placement.

The manager intends to declare, for existing units, an advance distribution for the period from April 1 to the day immediately prior to the date of issue of the new units.

The advance distribution is intended to ensure that the distributable income of the Reit before the issue of new units goes to existing units.

The manager will make a formal application to the Singapore Exchange for the listing of the new units to be issued.