The exercise will raise S$828.3m to be used primarily for reducing existing borrowings. The rights issue will reduce gearing from current 43.1% (after taking into account fresh valuation dated 22 May 09) to 30.7%. The rights issue will provide financial flexibility, which is augmented by CCT's S$2.0b-worth of assets that are not pledged against any loans.
CCT's portfolio of investment properties is valued at S$6,029.6m based on latest valuation as at 22 May 09. This is 10.1% lower compared to valuation of S$6,710.6m as at 1 Dec 08. NAV/share is S$1.51 after taking into account the 1-for-1 rights issue and the latest valuation, much lower than previous S$2.91.
Rights units will be entitled to distributions which may accrue from 1 Jan 09. CCT is committed to maintain payout ratio of 100% for FY09.
The rights issue is fully underwritten by DBS, Cazenove (now part of Standard Chartered Bank) and UOB. Capitaland has a 31.4% stake in CC and has undertaken to fully subscribe for its pro rata entitlement of rights units.
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