AME Elite Consortium Bhd intends to launch an Initial Public Offering (IPO) of its forthcoming Real Estate Investment Trust (AME REIT), which would hold RM557.0 million in industrial and industrial-related real estate currently controlled by its subsidiaries.
The initial investment portfolio will include 34 industrial buildings and employees’ dormitories in or near AME’s managed industrial parks, which include i-Park@Senai Airport City, i-Park@Indahpura, and i-Park@SiLC. The highlighted properties have continuous tenancy agreements with AME’s domestic and foreign clients, with terms ranging from 2 to 12 years.
AME proposes to issue 520.0 million undivided interests in AME REIT (Units) and RM37.0 million in cash. Islamic finance will be used to fund the cash consideration.
The IPO will offer 254.8 million units out of the total issue of 520.0 million units. The Offer Issuance will include up to 130.0 million Units for AME shareholders, 10.4 million Units for the Malaysian public, and 7.8 million Units for qualifying AME and subsidiary workers and directors. Meanwhile, at least 106.6 million units will be made available to Bumiputera investors, who have been certified by the Ministry of International Trade and Industry (MITI), as well as institutional investors and select investors.
AME will be the controlling Unitholders of AME REIT after the conclusion of the Proposed Offering, which is scheduled in the second quarter of 2022, holding at least 51.0% of total issued Units.
Based on an assumed offer price of RM1.00 per Unit, AME is expected to raise RM254.8 million through the IPO. The estimated proceeds of RM254.8 million will be utilized to repay borrowings, RM4.3 million for expenditures related to the REIT’s establishment and the remaining RM160.5 million for future industrial property development and investment initiatives such as land purchases and joint ventures.
“The proposed REIT would unleash the tremendous potential of our investment assets by combining current high-quality tenancy for industrial buildings and dormitory apartments with recurring revenue.” Furthermore, the funds collected will help the Group’s future expansion as we look forward to exciting prospects in conjunction with the country’s success under the National Recovery Plan,” said Kelvin Lee Chai, Group Managing Director of AME Elite Consortium Bhd.
The final IPO offer price will be determined after taking into account a number of factors, including the financial history of the identified real estates, the pro forma net asset value per Unit upon listing, AME REIT’s future prospects and a forecast distribution yield, as well as book building with institutional investors.
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