Photo: flagstaffotos.com.au
Frasers Commercial Trust (FCOT) has proposed to acquire a new commercial asset, 357 Collin Street, worth A$237.7 million in Melbourne, Australia. This new investment will enlarge FCOT’s portfolio by 14.2% to approximately S$2 billion. To avoid overstretching its financial gearing that currently stands at 37.2%, the manager decided to use a combination of equity and debt financing to fund the acquisition. For the equity financing, they opted for a private placement instead of the typical rights issuance which is usually offered at discount to current unitholders. If the plan sounds reasonable to you, it was not in the case one unitholder who made her disgruntlement known during the recent extraordinarily general meeting.“Why don’t you give the chance to unitholders via a rights issuance? I’m sure a lot of shareholders would like to take up the new shares issued [at a discount]. I ......
