FRASERS Property has proposed to undertake a renounceable non-underwritten rights issue on the basis of 37 rights shares for every 100 existing shares, at an issue price of S$1.18 for each rights share.
It will allot and issue up to 1.09 billion rights shares, and if fully subscribed, will raise net proceeds of about S$1.28 billion.
Already, two of Frasers Property’s controlling shareholders, TCC Assets (TCCA) and Thai Beverage Public Co (ThaiBev) have given an irrevocable undertaking to subscribe for an aggregate of 940.17 million, or 86.63 per cent of the rights shares.
TCCA – which holds a 58.51 per cent stake in the company – is subscribing for some 634.98 million shares. In the case of ThaiBev, its indirect wholly-owned subsidiary, InterBev Investment (IBI) – which controls 28.12 per cent of Frasers Property – will subscribe for 305.19 million rights shares, being IBI’s entitlement of rights shares.
The issue price of the rights shares represents a discount of 4.8 per cent to the closing price of S$1.24 per share on Wednesday, and a discount of 3.6 per cent to the theoretical ex-rights price of S$1.224 per share based on the last traded price prior to the announcement.
Frasers Property said that it intends to utilise the net proceeds for the acquisition, investment, capital expenditure and development of industrial, logistics, and business park assets. About 54.7 per cent of the net proceeds raised will be used for this purpose.
Meanwhile, 19.5 per cent of the net proceeds will go to the establishment of private funds, joint ventures, or similar arrangements to invest in property assets, including that of commercial and ancillary assets.
Finally, the remaining 25.8 per cent of the net proceeds will be used for general corporate purposes, including transaction costs, strategic investments, acquisitions, fixed commitments, and development or redevelopment of existing assets.
In a bourse filing late on Wednesday, Frasers Property said that prevailing macroeconomic, social and geopolitical uncertainties have led to “added challenges to business whilst concurrently giving rise to new opportunities and trends”, especially in the areas of e-commerce adoption, the drive to build supply chain resiliency, as well as the reimagining of spaces.
The rights issue will thus “enhance the group’s ability to be agile and responsive to these trends, leverage its track record to capitalise on the above opportunities, and enable the group to prepare a future-ready business”.
Shares of Frasers Property closed on Thursday at S$1.25, up S$0.01 or 0.81 per cent.