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CapitaLand Commercial Trust’s Rights Issue: What Investors Need to Know

CapitaLand Commercial Trust (SGX: C61U) is a real estate investment trust (REIT) that owns commercial properties in Singapore. Some of the buildings in its portfolio include Capital Tower, Six Battery Road, and CapitaGreen.

The trust is currently undertaking a rights issue to partially fund the acquisition of the retail and office components of Asia Square Tower 2. The development also has a hotel premise, which is not included in the deal.

Here are some essential points you need to know about the REIT’s rights issue:

1. The rights issue gives unitholders the right, but not an obligation, to purchase additional new units of CapitaLand Commercial Trust in proportion to their existing unitholdings, at a fixed price, within a specific time frame.

2. CapitaLand Commercial Trust’s rights issue is renounceable. Investors in CapitaLand Commercial Trust who do not wish to subscribe for the rights units may choose to sell their rights entitlements to other investors on the open market to monetise their value. They have up till 12 October 2017, 5 pm, if they wish to do so. An investor who sells her rights entitlements will dilute her unitholdings in CapitaLand Commercial Trust, but she will be compensated by the proceeds she receives from selling her rights entitlements.

3. For every 1,000 units held by unitholders, they are entitled to subscribe for 166 rights units. The issue price for the rights units will be S$1.363 each.

4. A total of 513,540,228 rights units will be issued. CapitaLand Commercial Trust is looking to raise gross proceeds of around S$700 million from the rights issue.

5. Unitholders who wish to accept their rights entitlements and apply for excess rights units must do so by 19 October 2017 at 5 pm. Application can be done via the forms sent by the Central Depository (CDP), or through automated teller machines (ATMs) operated by the participating banks (the closing time is 9.30 pm instead of 5 pm on the same day for applications made through ATMs).

6. The expected date of issue and the crediting of the rights units will be 26 October 2017. Meanwhile, the trading of the rights units on the stock market is expected to start from 27 October 2017, 9 am onwards.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P owns units of CapitaLand Commercial Trust.