Simultaneously, Australand announced a 7-for-10 non- renounceable rights issue of stapled securities in Australand to raise a fully underwritten A$475 mn. This is at an issue price of A$0.40 (S$0.47) per new stapled security, representing a 20% discount to the closing price on 24 July 2009.
Capitaland has cash hoard of S$5.5 bn and net gearing of 32%. This is more than enough for CAPL to subscribe to its entitlement at ALZ.
With most of its listed entities/REITs results out last week and Monday, we expect CAPL's 2Q09 and 1H09 results to be a net loss as most of its listed entities recorded write-downs. We believe investors should look beyond the accounting technicalities and recommend accumulating on dips. Maintain OUTPERFORM on a target price of S$4.21, based on parity on RNAV.
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