MI-Reit Postpones Fund-Raising Exercise

Source : The Business Times, January 19, 2008

MACARTHURCOOK Industrial Reit (MI-Reit) is postponing its $200 million equity fund-raising exercise given the poor market conditions, the trust said yesterday.

‘We have taken into consideration the current turmoil in the international capital markets in reaching the decision to postpone the proposed equity fund- raising to preserve the value of unitholders’ equity,’ said Chris Calvert, CEO of MI-Reit’s manager.

The trust announced in December that it intended to raise up to $200 million in gross proceeds. But now, the proposed equity fund-raising will be postponed until ‘markets are more conducive’, the trust said.

MI-Reit had intended to use the proceeds of the exercise to refinance its recent property acquisitions in Singapore and Japan, thereby freeing up capital for further acquisitions.

Following the expected completion of its committed acquisitions in the fourth quarter ending March 31, 2008, the aggregate leverage of MI-Reit and its subsidiary and controlled entity Japan Industrial Property will be about 41 per cent - notwithstanding the equity fund-raising, the Reit said yesterday. ‘This gearing is comfortably within MI-Reit’s long-term target gearing of 40- 50 per cent,’ the trust said in a filing to the Singapore Exchange.

Stock markets across Asia have taken a beating this month on the back of turmoil in the global capital markets, brought on by the sub-prime loans crisis and fears of a recession in the United States.

In Singapore, the benchmark Straits Times Index has slipped 10.4 per cent since the start of the year. In contrast, MI-Reit’s stock has fallen 18.2 per cent, losing three cents to close at a one-year low of 90 cents yesterday.