This will fund debt repayment and add headroom.
Cache Logistics Trust (CACHE) issued a rights issue of 162.6 million new units to raise gross proceeds of $102.7m.
According to OCBC Investment Research, rights units will be offered at a ratio of 18 new units for every 100 existing ones. Units were priced 63 cents each.
Proceeds will be used to partially repay CACHE’s debt to reduce aggregate leverage and create additional headroom.
Here's more from OCBC:
On a pro forma basis, FY16 DPU would decrease by 10.9% from 7.725 S cents to 6.882 S cents.
Similarly, pro forma FY16 NAV per unit would decrease by 3.3% from S$0.779 to S$0.753.
The rights units will rank pari passu to the existing units, and will include the right to distributions which have accrued for 3Q17.
This will reduce CACHE’s gearing from 43.4% as at 30 Jun 2017 to 35.5%. Against the regulatory gearing limit of 45%, Cache will have an enlarged debt headroom of S$281.1m for potential acquisitions as well as asset enhancement initiatives.
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