KUALA LUMPUR (Sept 3): IGB Commercial Real Estate Investment Trust (REIT) has fixed 71 sen as the price for the institutional portion of its initial public offering (IPO), notably lower than the indicative price of 83 sen apiece set for its book-building exercise.

According to a bourse filing by IGB Bhd, the institutional price was set following the completion of the book-building process on Sept 2.

IGB Commercial REIT units were also offered to shareholders of IGB Bhd via a restricted offer for sale (ROFS). IGB Bhd shareholders were entitled to subscribe to two ROFS units at RM1 each for every five shares held. In addition, shareholders who subscribed to the ROFS were entitled to distribution in specie (DIS) on the basis of three DIS units for every two ROFS units subscribed. 

In a nutshell, IGB Bhd shareholders will be paying RM2 for five units of IGB Commercial REIT, representing 40 sen each, which is at a nearly 44% discount over the institutional price of 71 sen. 

Nonetheless, the ROFS received lukewarm response as the REIT’s manager received valid acceptances for 241.95 million ROFS units and 362.92 million corresponding DIS units, representing a subscription rate of 78.72% out of the total 307.34 million ROFS units and 461 million corresponding DIS units.

Hong Leong Investment Bank (HLIB), the principal adviser, said the unsubscribed ROFS and the corresponding DIS will be placed out to institutional and selected investors.

The REIT’s assets include Menara IGB, IGB Annexe, Centrepoint South, Centrepoint North, Boulevard Properties, Gardens South Tower, Gardens North Tower and Southpoint Properties at MidValley City.

On top of that, it owns office buildings in the Golden Triangle, namely Menara Tan & Tan, G Tower and Hampshire Place Office.

Against the backdrop of the implementation of the movement control order (MCO) to contain the Covid-19 pandemic and cautious outlook for office space, the REIT manager had to downsize the unit offering to 898.33 million (including the institutional offering) compared with 1.227 billion units previously — comprising 945 million units to IGB Bhd shareholders and at least 282 million units to institutional investors.

The tentative listing date was also postponed to Sept 20 from July 30.

The IPO's joint bookrunners are HLIB, Maybank Investment Bank Bhd and RHB Investment Bank Bhd.

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