Frasers Centrepoint Trust (FCT) (SGX:J69U
) announced on July 1 that it has entered into an agreement with an unrelated third party for the proposed divestment of White Sands mall for $467 million.
The divestment consideration represents an 8.4% premium to its independent valuation of $431 million as of May 31. This will result in a net gain of around $32.4 million for the manager.
FCT states that the net proceeds from the divestment will be approximately $454.1 million and it intends to utilise the net proceeds to pay down debt.
On a pro forma basis, FCT’s aggregate leverage will be reduced from 40.0% to 36.5% while net asset value per unit will improve from $2.23 to $2.25. On the distribution front, distribution per unit (DPU) is expected to decline from 12.113 cents to 11.889 cents post completion of the divestment.
“The divestment is part of our proactive portfolio management strategy to strengthen FCT’s portfolio resilience and to unlock value for unitholders. The transaction will enhance FCT’s financial position through the lowering of its aggregate leverage, and provide us with headroom to redeploy it into future growth opportunities,” says Richard Ng, CEO of the manager.
The manager expects the completion of the White Sands mall divestment to take place around Sept 30.
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Units in FCT closed 3 cents lower, or down 1.31% to $2.26 on June 30.
