Circular to Unitholders - Suntec REIT

(ii)
the Enlarged Portfolio,
including the pro forma impact in the situation where the Deferred Units had been entirely issued
on 9 December 2004, the date of admission of Suntec REIT to the Official List of the SGX-ST
(the “Listing Date”) and the Forecast Year:
(i)
(ii)
based on (a) an illustrative conversion price of S$2.33 to S$2.79 for the Convertible Bonds
and (b) an aggregate principal amount of up to S$450,000,000 for the Convertible Bonds
(which increases Suntec REIT’s Leverage Ratio from 23.3% as at 30 June 2007 (see
paragraph 5.3 in the Circular for further details) to approximately 36.6%); and
in the following scenarios:
(a)
(b)
Scenario A: assuming that the Conversion Units had been issued at the beginning of
the Forecast Year; and
Scenario B: assuming that the Conversion Units have not been issued.
For instance, under Scenario A and based on an illustrative conversion price of S$2.51 (the
mid-point in the illustrative conversion price range of S$2.33 to S$2.79) for the Convertible
Bonds, the Acquisition, combined with the proposed Debt Financing, will provide a DPU
accretion of 0.25 cents (an increase of approximately 3.0%) which will increase Suntec
REIT’s DPU from 8.32 cents to 8.57 cents for the Forecast Year. At the lowest illustrative
conversion price of S$2.33, the Convertible Bonds issued will be fully converted into
approximately 193.1 million Conversion Units representing approximately 13.5% of Suntec
REIT existing Units as of 30 June 2007. At the highest illustrative conversion price of
S$2.79, the Convertible Bonds issued will be fully converted into approximately 161.3
million Conversion Units representing approximately 11.3% of Suntec REIT existing Units
as of 30 June 2007.
Under Scenario B and based on an illustrative coupon rate of 3.00% and a conversion
premium of 35% for the Convertible Bonds, the Acquisition, combined with the proposed
Debt Financing, will provide a DPU accretion of 0.37 cents (an increase of approximately
4.4%) which will increase Suntec REIT’s DPU from 8.32 cents to 8.69 cents for the
Forecast Year.
Based on market conditions, the Manager will determine the amount of financing to be
raised from the Debt Financing and the Issue of Convertible Bonds. The Manager may
decide to finance the Total Acquisition Cost by the issue of Consideration Units and a draw
down of the Debt Financing, if the Manager determines this to be in the best interests of
the Unitholders.
The table in Scenario C is presented for the purposes of illustrating the pro forma impact
in the event that the Total Acquisition Cost is financed by the issue of Consideration Units
and a draw down of the Debt Financing. Under Scenario C, based on an illustrative interest
rate of 3.5%, the Acquisition, if funded by the issue of Consideration Units and a drawdown
from the Debt Financing, will provide a DPU accretion of 0.22 cents (an increase of
approximately 2.6%, which will increase Suntec REIT’s DPU from 8.32 cents to 8.54 cents
for the Forecast Year).
The forecast on the tables presented on the following pages must be read together with the
detailed Profit Forecast as well as the accompanying assumptions and sensitivity analysis
in Appendix C of the Circular, and the report of the Independent Accountants on the Profit
Forecast in Appendix D of the Circular.
F-13