Sunday, June 23, 2019

Cromwell European REIT - Property Acquisition and Private Placement 21-06-2019

Property Acquisition and Private Placement
Cromwell European REIT (CEREIT) went on a trading halt and announced their intent to acquire 6 new properties in France and Poland for a total of 247m EUR, which is expected to increase net initial yield by 7.4%. To that end, they have raised fund of 150m EUR for the acquisition via a private placement at 0.46 EUR per unit.

Post-placement, the share base is enlarged by 326,086,000 units (about 15%). Consequently, one can expect the distribution down the road to also drop by about 13.1% before accounting for the increase in DPU from the new properties.

You can read more about the acquisition here and here, and the private placement here and here.

Distribution for existing shareholders
To ensure fairness to existing shareholders, the distribution for period 1 Jan 2019 - 1 Jul 2019 will be paid out prior to the issuance of new shares. The stock will go ex-dividend (XD) when the market opens on 28 Jun 2019, with the distribution for the half-year is currently estimated to be 0.0205 EUR per unit (the amount is to be confirmed later on). Payment of distribution is expected on 28 Jul 2019. Comparatively, CEREIT usually gives distribution about 3 months after they have gone XD.

The next distribution will comprise of period 2 Jul 2019 - 31 Dec 2019 after issuance of new shares. Thereafter, the distribution period will continue to be semi-annual as per its usual practice.

My thoughts

Thanks for reading.

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