Charter Hall Education Trust Completed its Fully Underwritten Institutional Placement

Leading Australian Real Estate Investment Trust (REIT), Charter Hall Education Trust (ASX: CQE) has successfully completed the fully underwritten institutional placement, which was announced on 26 March 2019. This placement was undertaken to fund the acquisition of 13 early learning centers, and additional proceeds will be used to repay debt.

Driven by the significant demand from new and existing institutional investors, the company has increased the size of the placement to $120 Mn. Earlier, the size of the placement was $100 million as announced on 26 March 2019.

As per the announcement, CQE’s 31 December 2018 pro forma gearing will decline to 25.3 percent and its pro forma NTA for the same date will uplift to $2.93 per unit.

As a result of the placement, the company will be issuing 35,820,896 new units at a price of $3.35 per unit and they will settle on Friday, 29 March 2019, with an allotment and normal trading expected to take place on 1 April 2019.

The trust has confirmed that the placement is within CQE’s existing 15% placement capacity and does not require securityholder approval.

The company is now intending to undertake a non-underwritten Unit Purchase Plan (UPP) to raise up to $5 Mn under which all the eligible securityholders in New Zealand and Australia will be allowed to apply for up to $15,000 of new units.

The placement issue price for UPP units is $3.35 per unit. UPP units will rank equally with existing Charter Hall Education Trust Units from the issue and they will not be entitled to the distribution for the three months ending 31 March 2019 but will be entitled to the distribution for the three months ending 30 June 2019.

On 25 March 2019, the company announced the distribution of 4.0 cents per unit (cpu) for the quarter ending 31 March 2019. The dividend is having an ex-distribution date of 28 March 2019, the record date of 29 March 2019 and payment date of 24 April 2019. The Distribution Reinvestment Plan (DRP) will apply to this distribution with a discount of 1.5% to the average of the daily volume weighted average market price recorded on the ASX, commencing on 3 April 2019 through to 18 April 2019.

Earlier on 26 March 2019, the company’s shares were placed in a trading Halt at the request of CQE, however, the shares have now resumed trading following the announcement regarding the completion of the institutional placement.

In the last six months, the share price of Charter Hall Education Trust uplifted by 25.70% as on 25 March 2019. At Market close, CQE’s share was trading at the price of $3.520 with the market capitalization of circa $923.07 million as on 27 March 2019. It has a 52-week high of $3.580 and 52-weeks low of $2.580 with an average volume ~254,883.


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