Ascott Reit Rights Issue an Issue? (Part 1)

Ascott Residence Trust earlier this month announces a Rights Issue to raise gross proceeds of approximately $442.7M. Pursuant to the Rights Issue, 481,688,010 new units in Ascott REIT (“Rights Units”) will be offered at the rights ratio (“Rights Ratio”) of 29 Rights Unit for every 100 existing units in Ascott REIT. The last time that Ascott issued rights was in 2013. The offer price was $1.00, on the basis of 1 unit for every 5 existing units owned.

See. I have proof. Now cheaper. Shiok?

The previous offer price was approximately approximately 22.5% discount to the closing price of S$1.29 per unit on 4 November 2013. The current offer price is approximately 21.5% discount to the closing price of S$1.17 per unit in on 6 March 2017. Oops. It is actually 1% more expensive. Ggrrrrr.

In March 2016, guess what happen? Ascott announces a private placement exercise at an issue price of $1.055 per new unit.

The share price is going down and the offer price for new Units is getting cheaper. I purchased 8000 shares during this time. My purchase price was $1.07. At my purchase price of $1.07, the yields I would be getting are as shown in the diagram.

Of course I could not receive the past dividends before my purchase date. It just shows the yield I could possibly receive in the past based on my purchase price. It's above 7% for the past few years. A yield I am happy with and so I bought. However, there are a few things that I am unhappy with the current Rights Issue. So did I accept and apply for excess rights? 

To be continued ...

Part 2