KUALA LUMPUR (Aug 30): Axis Real Estate Investment Trust (KL:AXREIT) is proposing a private placement to raise up to RM454.99 million for repayment of bank financing.

The proposed placement involves up to 15.05% of its issued units, or 263 million new units, to investors to be identified later, Axis REIT said in an exchange filing.

The last private placement done by Axis REIT was in December 2022, when it raised RM175 million from issuing 100 million units at RM1.75 apiece.

The REIT has 1.747 billion issued units as at Dec 18, 2023.

As at end-June, Axis REIT had RM1.69 billion debt, comprising RM909.5 million short-term financing and RM780.71 million long-term financing.

Net gearing stood at 0.59 times, based on cash balances of RM12.78 million and total unitholders' funds of RM2.83 billion.

“The proposed placement is in line with the board’s strategy to reduce Axis REIT’s financing ratio as part of prudent capital management. This will provide Axis REIT with sufficient financial headroom to continue pursuing future acquisitions of new properties and carry out development projects via bank financing which is in line with its capital management and growth strategy,” Axis REIT said.

For illustrative purposes only, assuming the maximum number of placement units are issued at an issue price of RM1.73 per unit, the gross proceeds to be raised is RM454.99 million.

It has earmarked RM449.76 million for repayment of bank financing and the remaining RM5.23 million for defraying estimated expenses relating to the placement exercise.

The proposal is expected to be completed by the fourth quarter of 2024.

Maybank IB has been appointed as the principal adviser.

Axis REIT’s units settled unchanged at RM1.80, valuing the group at a market capitalisation of RM3.15 billion.