Keppel DC REIT is reaching out to its shareholders with an opportunity to purchase additional units through what’s known as a rights issue. They’re inviting investors to buy 86 new units for every 1,000 they already own, with each unit priced at S$2.03. The window for subscribing to these rights opened on December 2nd and will stay open until December 10th, 2024.
Now, you might be asking yourself, why do REITs decide to issue rights and go down the path of preferential offerings? Well, these financial maneuvers are typically used when a REIT needs to gather more funds for specific goals. If you’re not quite sure what rights and preferential offerings entail, don’t worry—we’ve got you covered. Keep reading to get a clearer understanding of these terms.
### What is a Rights Issue?
A rights issue is essentially a method companies use to generate extra capital. They do this by giving existing shareholders the chance to buy new shares at a rate that’s usually lower than the market price. This approach gives shareholders the option to retain their current level of ownership in the business…
