CapitaLand ICT to acquire 50% of Ion Orchard in $1.85b deal

CapitaLand Integrated Commercial Trust (CICT) is proposing to acquire a 50 per cent interest in Ion Orchard and its connecting underpass, Orchard Link, from its sponsor CapitaLand Investment (CLI).

- 

Based on 50 per cent of the agreed property value, which amounts to $1.85 billion, the total outlay for the deal is estimated at $1.1 billion after factoring in transaction-related expenses, as well as adjustments for 50 per cent of a secured bank loan taken out by Ion Orchard.

On Sept 3, CICT said it intends to finance the transaction with net proceeds from a private placement and pro rata non-renounceable preferential offering to raise gross proceeds of at least $1.1 billion.

A pro rata non-renounceable preferential offering allows existing unit-holders to purchase additional CICT units in proportion to their current ownership. However, these rights may not be traded or sold.

The issue price for both parts of the fund-raising exercise is estimated to fall between $2.038 and $2.091 for each private placement unit, and $2.007 for each preferential unit. The private placement issue price range represents a discount of between 2 per cent and 4.5 per cent to CICT's volumeweighted average price (VWAP) of $2.1338 per unit based on its last full market trading day before the announcement.