- ESR-LOGOS REIT (SGX:J91U) completed its private placement which was approximately 3.0 times subscribed. The issue price of S$0.330 per unit came in at the lowest end of its indicative range of S$0.330 to S$0.335. This represents a discount of 5.4% to its closing price prior to the private placement announcement.
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- Together, ESR-LOGOS REIT plans to raise gross proceeds of not less than approximately S$300m via EFR (equity fund raising) (S$150m from private placement + S$150m from preferential offering).
Strengthening balance sheet to lower its gearing level below 40% for prudent capital management
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- Meanwhile, ESR-LOGOS REIT identified up to S$450m of non-core assets to be divested. Post the EFR and the assumed divestments, gearing could be reduced further to 32.3%.
- ESR-LOGOS REIT is exercising prudent capital management, in our view, to lower its gearing level below 40% amid a higher interest environment. A lower gearing and increased debt headroom (S$1.1b post EFR based on the gearing limit of 45%) will also provide ESR-LOGOS REIT with the financial flexibility to fund potential future growth opportunities both organically and inorganically.
Revised fair value estimate of S$0.38 for ESR-LOGOS REIT
- Read more at SGinvestors.io.
