KUALA LUMPUR (Nov 5): Axis Real Estate Investment Trust's (Axis REIT) manager Axis REIT Managers Bhd plans to seek Axis REIT unitholders approval to place out up to 37.12 million new units or a 3% stake in the property trust to the Employees Provident Fund (EPF) and Retirement Fund (Inc), which is also known as Kumpulan Wang Persaraan (Diperbadankan) (KWAP).

Based on the issue price of RM1.72 a unit, Axis REIT expects to raise gross proceeds of approximately RM63.84 million from unit placement mainly to repay bank loans, according to Axis REIT's Bursa Malaysia filing today.

Axis REIT said the EPF and KWAP, being major unitholders of Axis REIT, already owned 14.46% and 11.97% stakes in Axis REIT respectively. As such, the EPF and KWAP did not participate in Axis REIT's ongoing placement of up to 247.46 million new units or up to 20% of Axis REIT's issued base of 1.24 billion units.

"The major unitholders of Axis REIT did not participate in the 1st tranche placement in view of Paragraph 6.04(c) of the Main Market Listing Requirements of Bursa Malaysia which stipulates that the new units to be issued pursuant to the proposed placement cannot be placed to, amongst others, a major unitholder who has an interest in the units of 10% or more of the total number of issued units unless prior unitholder approval is obtained in a general meeting for the precise terms and conditions of the issue pursuant to Paragraph 6.05 of the listing requirements.

"Nevertheless, the manager views EPF and KWAP as key investors in Axis REIT and the real estate investment trust sector, who have supported Axis REIT in the previous placement exercises. As such, the manager wishes to provide EPF and KWAP with the equal opportunity to participate at the same price as the successfully identified placees for the 1st tranche placement," Axis REIT said.

Axis REIT said it has fixed the issue price for the 1st tranche placement comprising 160.85 million new units or a 13% stake in the property trust at RM1.72 each to the placees via a book-building process.

"The manager is of the view that the 1st tranche placement and the proposed placement to EPF and KWAP resulting in an aggregate issuance of 16% of the total issued units of 1.24 billion units, will satisfy the manager's objective in terms of funding requirements and capital management.

"As such, should the placement units for the proposed placement to EPF and KWAP be fully subscribed, the manager does not intend to issue the remaining units allowed under the proposed placement.

"Barring any unforeseen circumstances and subject to all approvals being obtained, the proposed placement to EPF and KWAP is expected to be completed by the end of 2019," Axis REIT said.

At 3.31pm today, Axis REIT's unit price dropped two sen or 1.11% to RM1.78. The stock saw 795,900 units traded.