Kim Eng has lowered its target price on Singapore’s CitySpring Infrastructure Trust (CITY.SI) to $0.46 from $0.54 and maintained its hold rating.
CitySpring, which is owned by state investor Temasek, has proposed a renounceable 11-for-20 rights issue at $0.39 per rights unit to raise $205 million in net proceeds.
CitySpring, which is owned by state investor Temasek, has proposed a renounceable 11-for-20 rights issue at $0.39 per rights unit to raise $205 million in net proceeds.
Even though the use of the rights proceeds for the partial buyback of Australian dollar bonds could result in net interest cost savings of about $8.5 million, the capital raising is not used to fund any yield-accretive acquisition, Kim Eng said.
Assuming that the distribution amount to unitholders is maintained at around the same level as in the financial year ending March 2011, Kim Eng said it estimates a distribution per unit of 3.3 cents for 2012 based on the enlarged unit base.
At 11:13 a.m., CitySpring was down 2% at $0.50 on a volume of 1.9 million units. It has fallen around 12% so far this year.
We are writing from Weber Shandwick as the PR consultants for CitySpring Infrastructure Management, the Trustee-Manager of CitySpring Infrastructure Trust.
ReplyDeleteWe refer to the 4 July Kim Eng report on CitySpring Infrastructure Trust and wish to clarify that the price target of S$0.46 mentioned in the report is on a post-rights basis. According to the report, this price target takes into account CitySpring’s enlarged base of 1,519 million units after the completion of the rights issue.