Keppel Infrastructure Trust selling new units to raise $450 mil

SINGAPORE (Mar 14): The trustee-manager of Keppel Infrastructure Trust (KIT) announced Thursday is launching a rights issue to raise gross proceeds of $450 million.

This will be by way of a placement of new KIT units to institutional and other investors, as well as a non-renounceable underwritten preferential offering of new units to KIT unitholders.

The equity fund raising is intended to raise funds for the partial repayment of a facility arising from the A$770 million ($738 million) acquisition of Ixom HoldCo by KIT’s wholly-owned indirect subsidiary, IX Infrastructure, on Feb 19.

The acquisition was funded by a facility agreement dated Feb 12, with the trustee-manager as borrower.

Approximately $440.3 million, or 97.8% of the gross proceeds from the equity fund raising, will be used for the partial repayment of the facility, while the remaining $9.7 million will be used for the payment of the fees and expenses incurred from the equity fund raising.

The issue price of the placement units and the preferential offering units will be determined by joint lead managers, bookrunners and underwriters – Credit Suisse (Singapore), DBS Bank, the Singapore branch of The Hongkong and Shanghai Banking Corporation (HSBC), and United Overseas Bank (UOB) – following a book-building process.

Keppel Infrastructure Holdings, which holds approximately 18.2%, or 702,361,054 of units in KIT, has irrevocably undertaken to the trustee-manager that it will subscribe for placement units to maintain its percentage unitholding following the placement, and subscribe for its provisional allotments of preferential offering units under the preferential offering.

In addition, the trustee-manager intends to declare an advanced distribution for the period from Jan 1 to date immediately prior to the issue of the placement units. The quantum of distribution under this stub distribution will be 0.8577 cents per unit.

KIT says this is being proposed as a means to ensure fairness to holders of the existing units.

The next distribution thereafter will comprise KIT’s distributable income for the period from the date the placement units are issued up to March 31.

Unit in KIT last traded at 48.5 cents, before a trading halt was called at 3pm on Thursday.