Frasers Logistics & Industrial Trust

[MINX]

In a private placement, your holdings will be diluted, assuming you did not get to participate in the placement. It is not a free ride. Typically, the price in a private placement is lower than market price so non-participants lose out.

Whether or not the end result is yield accretive depends on the size of the private placement vs the income from the acquisitions.


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Every Reits are different. Private Placement allows major stakeholder to come in. It can be premium to price too.
Dilution is not a bad word if the impact is very minimal provided the Reit is well run. Is well run so far. So is not correct or wrong but which is better.

If it's yield accretive and only private placement, then our holding is diluted.

Imagine this action is repeated 3 to 5 times, what will we say?

We will need to watch the DPU continues to increase per share even with holding diluted. So boils down on how they manage forex and managing the asset DPU.

Cory

O. K.

Let's take a hypothetical example.

Let,s say there is 5 times private placement of a Reit.

Each time opmi's (aka pop & mom investors) holdings are diluted by 10%

By the 5th time, your 1000 shares left only 590.49 shares.

Is the DPU able to keep up or with the dilution of shares?

What is the actual price per share now?

Is the PE still the same before dilution?

What actually is the practice of private placement?

To keep mom & pop investors out of the picture?

Management usually choose private placement when they want to fast hand fast leg close the deal. From my observation, most reits intersperse private placements with rights issue, preferential offering & the occasional perpetual. Most managers will not contemplate consecutive private placements unless they want to end up with the same fate as sabana...

[lonewolf]

Management usually choose private placement when they want to fast hand fast leg close the deal. From my observation, most reits intersperse private placements with rights issue, preferential offering & the occasional perpetual. Most managers will not contemplate consecutive private placements unless they want to end up with the same fate as sabana...

I can think of at least one REIT that has only done solely private placement since IPO. No rights and no PO. And it has certainly not gone the way of Sabana.

It also starts with S. Wanna make a guess which REIT I am referring to? 

And just to take Temperment's example. I think this REIT has done more than 5 placements since IPO. And though I have not done a thorough calculation, I am sure that the DPU has certainly keep pace with dilution.

[MINX]

Management usually choose private placement when they want to fast hand fast leg close the deal. From my observation, most reits intersperse private placements with rights issue, preferential offering & the occasional perpetual. Most managers will not contemplate consecutive private placements unless they want to end up with the same fate as sabana...

I can think of at least one REIT that has only done solely private placement since IPO. No rights and no PO. And it has certainly not gone the way of Sabana.

It also starts with S. Wanna make a guess which REIT I am referring to? 

And just to take Temperment's example. I think this REIT has done more than 5 placements since IPO. And though I have not done a thorough calculation, I am sure that the DPU has certainly keep pace with dilution.

Any presents if i guess correctly? How about starhill Global reit? 

[corydorus]

What i mean is do not miss the forest for a tree. We need to look at net returns after everything. At the end of the day is how much into the pocket and capital value. Here's a good analysis by Kyith. Scroll down to the table titled : Different kinds of Capital Raising

http://investmentmoats.com/money-managem...over-time/


One strong Reit that has done multiple private placement is Ascendas Reit. Just look at the capital gains from the growth in the chart if we have invested. This do not include the high dividends we are getting.

https://finance.yahoo.com/chart/A17U.SI#...kifQ%3D%3D

[Musicwhiz]

Management usually choose private placement when they want to fast hand fast leg close the deal. From my observation, most reits intersperse private placements with rights issue, preferential offering & the occasional perpetual. Most managers will not contemplate consecutive private placements unless they want to end up with the same fate as sabana...

I can think of at least one REIT that has only done solely private placement since IPO. No rights and no PO. And it has certainly not gone the way of Sabana.

It also starts with S. Wanna make a guess which REIT I am referring to? 

And just to take Temperment's example. I think this REIT has done more than 5 placements since IPO. And though I have not done a thorough calculation, I am sure that the DPU has certainly keep pace with dilution.

This REIT should be Suntec REIT if I am not wrong. Have owned it since 2004 and only private placements.

[ghchua]

I think Frasers Centrepoint Trust also. No rights issue since listing.

[Boon]

Still has capacity to fund the acquisitions entirely with debt only.................... 
___________________________________________________________________________________________________________________

PROPOSED METHOD OF FINANCING THE PROPOSED TRANSACTION AND FINANCIAL EFFECTS
The Manager intends to finance the Total Transaction Cost, excluding the Acquisition Fee to be paid in Units, from either (i) debt facilities entirely or (ii) a combination of equity and debt financing. 

The final decision regarding the proportion of equity and debt financing to be employed for the purposes of financing the Proposed Transaction will be made by the Manager at the appropriate time taking into account the then prevailing market conditions. 
_____________________________________________________________________________________________________________________

As at 31 March 2017
 Weighted average cost of borrowings is 2.8%(1) per annum  Healthy interest cover ratio of 9.3 times
 No near term refinancing risks
 Low gearing level of 28.9%
 Available debt headroom of A$537 million to reach 45.0% aggregate leverage limit
 Established a S$1 billion multicurrency debt issuance programme to provide flexibility in its financing options for future acquisitions

http://flt.listedcompany.com/newsroom/20...NEI1.1.pdf
______________________________________________________________________________________________________________________

[lonewolf]

Score one for MusicWhiz!

And to ghchua for reminding me about FrasersCT!

Starhill carried out a rights issue in 09.

I owe CCT since 2010 and there were no rights/PO since that time. Not sure whether there was any prior to 2010.

CLT, FEHT, SPH REIT have also not carried out a rights/PO since IPO.

[corydorus]

News Out. Is Private Placement. About 3% discount.

http://www.businesstimes.com.sg/companie...es-at-s101


and a further announcement of advance CD due to the placement I believe.

http://infopub.sgx.com/FileOpen/Primo_No...eID=459166

[cyclone]

Financial Results for the Quarter ended 30 September 2017

Highlights :
* FLT achieved gross revenue of A$42.2 million for the Quarter, 4.8% above Forecast of A$40.3 million
* Adjusted Net Property Income of A$32.3 million, 4.7% above Forecast
* Distributable Income was 12.1% above Forecast at A$26.5 million
* Exceeds IPO Forecast for fifth consecutive quarter with DPU of 1.77 Singapore Cents
* Eexceeds IPO Forecast by 6.1% with FY2017 DPU of 8.85 Singapore Cents
* 31,947 sq m of new leases and renewals executed
* Portfolio occupancy improved to 99.4% as at 30 September 2017
* WALE of 6.75 years and minimal lease expiries of 2.5% (by gross rental income) for the financial year ending 30 September 2018
* FLT portfolio valued at A$1.91 billion, uplift of A$35.5 million over previous valuations.

More details in :
1. http://infopub.sgx.com/FileOpen/FLT_Fina...eID=476494
2. http://infopub.sgx.com/FileOpen/FLT_%20F...eID=476496
3. http://infopub.sgx.com/FileOpen/FLT_Resu...eID=476495