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Based on this case below calculate the WACC and DDM for this case show your calculation step by step CASE: INK REIT TO RAISE $
Based on this case below calculate the WACC and DDM for this case show your calculation step by step CASE:
INK REIT TO RAISE $B FROM RIGHTS ISSUE TO REPAY DEBT, FUND ACQUISITIONS
BY CHRISTOPHER CAILLAVET
Hong Kongs Link REIT on Friday proposed a rights issue to raise HK$ billion $ billion to pay down debt in the face of rising interest rates and fund acquisition of additional assets.
Asias biggest listed property trust will issue one rights unit for every five existing units held at a subscription price of HK$ per rights unit, Link said in a release.
Between and percent of the net proceeds will be used to repay existing debt and for general working capital, while the balance will be deployed for future investments with a focus on the retail, car park, office and logistics sectors across Asia Pacific.
The proposed rights issue will strengthen Link REITs capital base and position us to capture accretive investment opportunities amid real estate markets repricing, said Link chairman Nicholas Allen. It will further solidify our position as a leading Asia Pacific real estate investor and manager.
Unitholder Options
The rights issue is being fully underwritten by banking giants HSBC DBS and JP Morgan, Link said Friday.
The HK$ price per rights unit represents a percent discount to the theoretical exrights price of HK$ per unit and a percent markdown to the last traded price of HK$ on Thursday. Trading in the HKEXlisted units was suspended on Friday.
Qualified unitholders can opt to subscribe to the rights units, apply for excess rights units or sell their rights. They can also do nothing, in which case their proportion of the total number of units held will be reduced without compensation.
Link expects to send the offering documents to qualifying unitholders on March, with a deadline of March to accept and pay for the rights units.
In a media briefing, Link CEO George Hongchoy said the capital raise would position Link to capture emerging investment opportunities as real estate markets revive in the coming period.
We do believe that this is the right time to strengthen our capital base and to lower our net gearing below percent in one exercise, Hongchoy said in response to questions from Mingtiandi.
Reloading for Future Deals
Links latest manoeuvre comes after the REIT entered Singapore late last year with the citystates largest real estate acquisition of : the S$ billion $ billion purchase of a pair of suburban malls from Mercatus Cooperative Ltd
Link affirmed that the rights issue is not directly related to the Singapore acquisition and that the proceeds of the rights issue have not been earmarked for any specific investment opportunities.
Link REIT is committed to growth under our Link strategy, where we aim to optimise our portfolio through diversification and to grow our assets under management together with capital partners, Hongchoy said.
Each deal will be different, the CEO said, but Link expects to invest alongside pension funds, insurers and managers of thirdparty capital such as private equity fund managers.
The HK$ billion trust is also looking to add its own feecharging service managing thirdparty capital as a way to expand the business and income streams, Hongchoy said.
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