Yuexiu Reit seeks to raise US$415m from placement to fund acquisition

Yuexiu Real Estate Investment Trust plans to raise about US$415 million through a placement to finance its acquisition of Guangzhou International Finance Centre.

According to a term sheet sent to investors, Yuexiu Reit plans to offer up to 975.3 million units at HK$3.30 each, about an 8.6 per cent discount over the last price of HK$3.61 per share before trading was suspended yesterday morning, pending the release of an announcement. Its parent, Yuexiu Property, also requested that trading in its shares be halted at the same time.

The mainland-based company said it might raise another US$80 million from additional placements, subject to regulatory approvals.

The placement had generated strong response, said people familiar with the deal.

In May, Yuexiu Reit said it planned to acquire virtually all of Tower Top, a sister company, for 8.85 billion yuan (HK$10.9 billion) from Yuexiu Property. Tower Top indirectly owns 99 per cent of Guangzhou IFC.

One of the tallest skyscrapers in the world, Guangzhou IFC is a mixed-use commercial development with a total gross floor area of 457,357 square metres. It comprises a six-storey shopping mall, a 58-storey grade-A office building, a five-star hotel, a luxury serviced-apartment tower and a 1,700-space car park.