Sabana prices convertible Sukuk worth up to US$6.42 million (By IFN)

SINGAPORE: Sabana Real Estate Investment Management (Sabana), the manager of Sabana Shari’ah Compliant Industrial Real Estate Investment Trust (Sabana Shari’ah Compliant REIT), announced on the 6th September that it priced a proposed issuance of convertible Sukuk worth up to SG$8 million (US$6.42 million) at a profit rate of 4.5%. Pricing for the planned issuance was announced after Sabana disclosed on the same day its intention to issue the Sukuk, which will be convertible into units of Sabana Shari’ah Compliant REIT. The five-year notes will be issued under Murabahah and Ijarah principles and at an initial conversion rate of S$1.19 (96 US cents) per unit. The number of new conversion units to be allotted and issued, pursuant to the full conversion of the Sukuk, is 67.04 million, representing 10.5% of the REIT’s existing units in issue. SG$61 million (US$48.98 million) or 76.2% of the gross proceeds from the issuances will be used towards the acquisition of the 23 Serangoon North Avenue 5 property in Singapore, while SG$19 million (US$15.25 million) of the proceeds will be used for other general corporate purposes and to pay the fees and expenses related to the Sukuk issuance and the acquisition of the property. Sabana announced the acquisition of the Serangoon North property last month, noting that the acquisition will be injected into Sabana Shari’ah Compliant REIT’s existing portfolio of 20 properties. The acquisition is expected to be completed in the fourth quarter of this year. Meanwhile, it has appointed Morgan Stanley Asia (Singapore) as the sole bookrunner and lead manager for the issuance. The closing date for the issue is expected to fall by the 24th September this year.