RCR to inject nine malls worth P30-B

The RL Commercial REIT [RCR 7.06 ?0.9%] [link] board of directors approved a property-for-share swap transaction worth approximately P30 billion with RCR’s parent company, Robinsons Land [RLC 12.96 ?1.6%]. Under the terms made available, RLC will transfer nine malls to RCR with 324,107 sqm of gross leasable area (Robinsons Dasmariñas, Robinsons Starmills, Robinsons General Trias, Robinsons Cybergate Cebu, Robinsons Tacloban, Robinsons Malolos, Robinsons Santiago, Robinsons Magnolia, and Robinsons Tuguegarao), in exchange for 3,834,357,500 primary shares in RCR at a valuation of P8.00/share, a 16% premium over the previous day’s closing price.

  MB BOTTOM-LINE:  RCR is officially the hottest REIT on the PSE. The Gokongwei Family appears to be very serious about its plan to use RCR for a lot more swaps over the next five years. It’s wasted no time. Will massive P30-billion-plus injections become a yearly June event for RCR? Regardless, this is a huge transaction that will require RCR to pull some tricks to keep compliant with the REIT Law’s requirement that it maintain a public float of at least 33.33%. RCR’s public float is sitting at 35.93% (according to PSE EDGE), and this transaction would push that down to 28.8%. They cured this problem the last time by having RLC sell a bunch of RCR shares through a block sale at a discount, but that was for a much smaller number of shares. 

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