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Frasers Log Trust



Frasers Logistics and Industrial Trust (FLT), one of the crown jewels in my portfolio, announced that it raised $329 mil via a private placement. This private placement saw the issuance of 333.2 million shares at $0.987 per share (about a 5.4% discount over the VWAP as at 9 May).

The rest of the funding required for the purchase of its European assets will come from a preferential share offering to existing unit holders. Specifically, there is a 10 for 1 share offering, which would be priced between 0.942 and 0.967. Existing shareholders may subscribe for their allotment from 23 May .

I currently hold 170,000 FLT shares, and should theoretically be entitled to purchase another 17,000 shares at the discounted price. I will certainly try to get more if at all possible.

This announcement was a little bit disappointing. It would have been preferable if the private placement tranche was not nearly twice the size of the preferential share offering to existing unitholders, which leads to significant dilution. To ease the swallowing of this bitter pill, it seems that the preferential share offering is priced slightly lower than the private placement. Cold comfort. But as the Hokkiens like to say, "no fish, prawn also can" .

FLT also declared an advanced distribution prior to the date of the new units being issued, which is fair enough. This advanced distribution is estimated to be around 0.69 cents a share.  Coupled with the earlier announced half year distribution (until Mar 2018) of 3.61 cents, I expect the total dividends from FLY (payable in June) to be around 4.3 cents a share, or around $7,310.  Ka-ching. These funds will go straight into the war effort against the eternal enemy, that is, Work.

Onward to FI!




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