KUALA LUMPUR: Atrium Real Estate Investment Trust (REIT) has proposed to raise RM85.3 million via a private placement and a special issuance of units to fund asset enhancement initiatives (AEI) on its Atrium Shah Alam 4 industrial property.
Mercury Securities Sdn Bhd said the firm needed to wait for information on the tenancy terms for Atrium Shah Alam 4 before arriving at an opinion on the proposed private placement and special issuance of units.
It said the private placement and special issuance of units are expected to dilute the earnings per unit (EPU) and dividend per unit (DPU) of Atrium REIT for the financial year ending December 31, 2022.
Atrium REIT's proposed private placement is for up to 40,925,136 units.
The proposed special issuance is for up to 20 million units to Chan Kam Tuck, a major unitholder of Atrium REIT, and persons connected with him, if any.
Mercury Research said the proposals could result in an enlarged issued unit capital comprising 265.55 million units.
It said that based on the indicative issue price of RM1.40 per unit, the proposals are expected to raise gross proceeds of approximately RM85.3 million.
"The exact amount of the gross proceeds to be raised from the proposals would depend on the actual issue price and the number of units to be issued, which the company will determine later," it said.
According to Mercury Research, Atrium REIT plans to utilise RM81 million of the gross proceeds to perform AEI on its Atrium Shah Alam 4 property.
Additionally, the firm said Atrium REIT plans to utilise RM3.1 million of the gross proceeds for working capital purposes and RM1.2 million for estimated expenses concerning the proposals.
"Atrium REIT will finance any shortfall required to fund the AEI through Atrium REIT's internally generated funds and bank borrowings," it added.