PARKWAY Life Real Estate Investment Trust’s (Parkway Life Reit) private placement to fund its acquisition of 11 nursing homes in France has closed at the issue price of S$3.80 per new unit.
This represents the lowest end of the estimated issue price range of between S$3.80 and S$3.88 per new unit when the acquisition was first announced.
On Wednesday (Oct 23), its manager said the private placement was oversubscribed and drew strong demand from new and existing institutional and accredited investors.
Out of the total expected gross proceeds of about S$180 million, the Reit manager intends to use around S$159.9 million – or some 88.8 per cent, to fully fund its proposed acquisition of nursing home assets in France.
The remaining S$20.1 million, or about 11.2 per cent, will be used to pay estimated professional and other fees and expenses to be incurred from the private placement and the acquisition.
Under the private placement exercise, the Reit will issue nearly 47.4 million new units on or around Nov 1, 2024. Trading of the new units on the Singapore Exchange is expected to commence at 9 am on the same day.
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Parkway Life Reit’s policy is to pay out its distributable income on a semi-annual basis to unitholders.
Its manager intends to declare an advanced distribution for Jun 1 to the date preceding the day of issue of the new private placement units, at an estimated range of S$0.048 to S$0.052.
The issue price of S$3.80 represents a discount of 3.5 per cent to the adjusted volume-weighted average price (VWAP) of S$3.94 per unit, which excludes an estimated advanced distribution of S$0.05 per unit – being the midpoint of the Reit’s estimated advanced distribution range.
The issue price also stands at about 4.7 per cent to the VWAP of S$3.99 per unit for all trades done for the preceding market day on Oct 21, up until the time the placement agreement was signed the following day.
Units of Parkway Life Reit closed flat on Monday at S$3.99, before it called for a trading halt the following morning. The counter resumes trading on Wednesday.
