JAKARTA (TheInsiderStories) – The Real Estate Investment Trust (REIT) publisher, Lippo Malls Indonesia Retail Trust (LMIRT) raised S$281 million (US$211.28 million) from the issuances of 53.84 percent new units, the management said on Tuesday (01/19). The company announced every 100 LMIRT units can order with an additional 160 units at S$0.060.
The new unit will be listed on the Singapore Stock Exchange (SGX) on Jan. 22. The management explained, fresh funds from the rights issue will be used to purchase Lippo Mall Puri in Jakarta from PT Mandiri Cipta Gemilang, a subsidiary of property firm, PT Lippo Karawaci Tbk (IDX: LPKR) for Rp3.5 trillion ($248.23 million).
LMIRT is the only REITS managed by the Lippo Group and has been listed on SGX since Nov. 19, 2007. The parent has announced to divesting Lippo Mall Puri to its affiliated party, PT Puri Bintang Terang (PBT), a subsidiary whose entire shares directly owned by the issuer.
On March 11, 2019, both parties entered into a conditional sale and purchase agreement related to the Property Transfer Plan. This transaction was carried out through the sale and transfer of property by Mandiri Cipta as property owner and seller to Puri Bintang as the buyer.
The parties agreed to complete the transaction by March 31, 2021 or other date as agreed. The management emphasized that the transaction is part of the Lippo Karawaci‘ asset-light strategy and is carried out to increase the liquidity.
For background, the conditional sale and purchase agreement was signed on March 11, 2019 by the two companies. The payment options included the proceeds from the rights issue of LMIRT, which will be distributed to Binjaimall Holdings Pte. Ltd., in the form of capital or loans.
Then, the parent will give a loans to Binjaimall, where then all the funds will be channeled to Puri Bintang and then used by the company to pay the property purchases. Binjaimall is a subsidiary of LMIRT. The unit of Lippo Group is an integrated real estate company in Indonesia with total assets of $3.8 billion as of March 31, 2020.
Present in 40 cities, the property developer managed 1,411 hectares of landbank through two units, PT Lippo Cikarang Tbk (IDX: LPCK) and PT Gowa Makassar Tourism Development Tbk (IDX: GOWA), with ownership 84.0 percent and 62.7 percent, respectively. The subsidiaries develops and operates Lippo Cikarang in Bekasi, West Java and Tanjung Bunga in Makassar, South Sulawesi.
In addition, the company also has a 55.4 percent stake in PT Siloam International Hospitals Tbk (IDX: SILO), a network of leading private hospitals in Indonesia, with 37 hospitals in 24 cities throughout Indonesia. CEO of Lippo Karawaci, John Riady, has said that the divestment of assets to affiliates was one of the company’ steps in recycling the assets to generate the new capital.
US$1: S$1.33, Rp14,100
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