Suntec REIT’s plans to list SGD300 million (USD221 million) in aggregate principal amount of 1.75% convertible bonds have received in-principle approval from Singapore Exchange, the REIT announced on 22 August.

The convertible bonds are due in 2021, and are convertible into cash or new ordinary units of Suntec REIT. Up to 142,789,148 new units are to be issued upon the full conversion of the convertible bonds.

The Singapore-listed office REIT first made known of plans to issue convertible bonds on 11 August. The bonds will be issued to institutional, and other qualified investors.

About 65% of net proceeds from the issue will be used to fund acquisition of an interest in Southgate Complex in Melbourne, Australia. The remaining 35% will be used towards partially refinancing debt, and for general working capital purposes, said the REIT.

Suntec REIT announced in early August 2016 that it was acquiring a 50% interest in Southgate Complex for AUD289 million (USD213 million).

“The acquisition will further enhance Suntec REIT’s income and geographical diversification”, said Yeo See Kiat, CEO of the REIT’s manager in a statement on the purchase then.

Units of Suntec REIT finished the trading day about 2.3% lower from its previous close on the Singapore Exchange to end at SGD1.69.