Replace - Intermediate Securities Distribution :: Mandatory

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, EUROPEAN ECONOMIC AREA, THE UNITED KINDGOM, CANADA, JAPAN OR AUSTRALIA

(Constituted in the Republic of Singapore pursuant to a trust deed dated 19 October 2006 (as amended))

LAUNCH OF RIGHTS ISSUE

TO RAISE GROSS PROCEEDS OF APPROXIMATELY S$158.2 MILLION

Capitalised terms used herein, unless otherwise defined, shall have the meanings ascribed to them in the announcement of First Real Estate Investment Trust ("First REIT") dated 29 November 2020 titled "Restructuring of Master Leases" and in the announcement of First REIT dated 28 December 2020 titled "Proposed Rights Issue" (the "Rights Issue Announcement").

1. INTRODUCTION

First REIT Management Limited, in its capacity as manager of First REIT (the "Manager"), refers to the announcements of First REIT dated 29 November 2020, 24 December 2020 and 28 December 2020 (the "Announcements"), and the circular to unitholders of First REIT

("Unitholders") dated 28 December 2020 (the "Circular") in relation to the Proposed LPKR

MLA Restructuring and the Rights Issue (as defined herein), among other things.

As previously announced in the Announcements and as set out in the Circular, the Manager proposes to raise gross proceeds of approximately S$158.2 million on a renounceable basis to Eligible Unitholders (as defined herein) through a non-underwritten rights issue1 (the "Rights Issue") of up to 791,063,000 new units of First REIT ("Units") for the purposes of, among others, repayment of part of the 2018 Secured Loan Facilities to complete the refinancing exercise and avoid an imminent default of the S$195.52 million repayment obligation on 1 March 2021, master lease restructuring costs, as well as for working capital purposes.

The table below sets out the principal terms of the Rights Issue.

Principal Terms of the	Description
Rights Issue
Issue Price	: S$0.20 per Rights Unit.
Discount (specifying	: The Issue Price represents a discount of (i) approximately
benchmarks and	50.6% to the Closing Price (as defined herein) of S$0.405 per
periods)	Unit, (ii) approximately 33.3% to the TERP (as defined herein)
	of S$0.30 per Unit and (iii) approximately 44.4% discount to
	the pro forma net asset value ("NAV") per Unit after the

1. The Manager will be relying on the Enhanced Share Issue Limit announced by the SGX RegCo on 8 April 2020 for the Rights Issue. The general mandate for the Enhanced Share Issue Limit had been approved by Unitholders at First REIT's annual general meeting dated 20 May 2020.
2. As at 31 December 2020, based on the unaudited financial statements for the financial year ended 31 December 2020.

1

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, EUROPEAN ECONOMIC AREA, THE UNITED KINDGOM, CANADA, JAPAN OR AUSTRALIA

	completion of the Rights Issue of S$0.360 per Unit.
Allotment Ratio	: 98 Rights Units for every 100 Existing Units (as defined
	herein), fractional entitlements to be disregarded.
Use of Proceeds	: (i) To repay part of the 2018 Secured Loan Facilities, (ii) to
	pay professional and other fees incurred or expected to be
	incurred in connection with the Rights Issue, (iii) for master
	lease restructuring costs and (iv) for working capital.

Purpose of Rights Issue : To raise proceeds to finance the matters described above in "Use of Proceeds".

To demonstrate its support for First REIT and the Rights Issue, each of First REIT Management Limited (in its own capacity) ("FRML"), OUE Lippo Healthcare Limited ("OUELH") and OUE Limited ("OUE") had provided an irrevocable undertaking to the Manager on 24 December 2020. Details of the Irrevocable Undertakings (as defined herein) are set out in paragraph 2.3 of this announcement.

2. THE RIGHTS ISSUE

2.1 Principal Terms of the Rights Issue

The principal terms of the Rights Issue are summarised below:

Basis of Provisional	: The Rights Units are proposed to be offered to Eligible
Allotments	Unitholders on the basis of 98 Rights Units for every 100
	existing Units ("Existing Units") held by Eligible Unitholders
	as at the time and date on which the transfer books and
	register of Unitholders will be closed to determine the
	provisional allotments of Rights Units to Eligible Unitholders
	(the "Rights Issue Record Date"), fractional entitlements to
	be disregarded.
Issue Size	: 791,062,223 Rights Units.
Issue Price	: S$0.20 per Rights Unit.
Discount	: The Issue Price represents a discount of:
	(i)	approximately 50.6% to the closing price of S$0.405 per
		Unit on Singapore Exchange Securities Trading Limited
		(the "SGX-ST") on 24 December 2020, being the last
		trading day of the Units prior to the Rights Issue
		Announcement ("Closing Price");
	(ii)	approximately 33.3% to the theoretical ex-rights price
		("TERP") of S$0.30 per Unit, which is calculated as
		follows:

2

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, EUROPEAN ECONOMIC AREA, THE UNITED KINDGOM, CANADA, JAPAN OR AUSTRALIA

TERP = Market capitalisation of First REIT based on the Closing Price

+ Gross proceeds from the Rights Issue

Units outstanding after the Rights Issue

and

(iii) approximately 44.4% discount to the pro forma NAV per Unit after the completion of the Rights Issue, being S$0.360 per Unit.

Status of Rights Units : The Rights Units will, upon allotment and issue, rank pari passu in all respects with the Existing Units in issue as at the date of issue of the Rights Units, including the right to any distributions which may accrue prior to the Rights Issue as well as all distributions thereafter.

Eligible Unitholders who decide not to accept in full their Rights Entitlements 3 can, where applicable, make arrangements to trade them on the SGX-ST under the book- entry (scripless) settlement system during the "nil-paid" rights trading period prescribed by the SGX-ST. If it is practicable to do so, the Manager may also, at its absolute discretion, make arrangements for the Rights Entitlements which would otherwise have been allotted to Ineligible Unitholders (as defined herein) to be sold "nil-paid" on the SGX-ST as soon as practicable after dealings in the Rights Entitlements commence.

Such sales may, however, only be effected if the Manager, in its absolute discretion, determines that a premium can be obtained from such sales, after taking into account all expenses to be incurred in relation thereto.

Rationale for the Rights : As mentioned in the announcement of First REIT dated 24

Issue	December 2020 in relation to the Refinancing Facility (as
	defined herein), Perpetual (Asia) Limited, in its capacity as
	trustee of First REIT (the "Trustee"), has entered into a facility
	agreement with, among others, Oversea-Chinese Banking
	Corporation Limited and CIMB Bank Berhad, Singapore
	Branch on 24 December 2020 to refinance the 2018 Secured
	Loan Facilities with a loan facility of up to S$260 million (the
	"Refinancing Facility") in order to meet the S$195.5 million
	repayment obligation on 1 March 2021 under the 2018
	Secured Loan Facilities.
	The maximum amount of S$260 million under the Refinancing
	Facility is lower than the amount of S$400 million under the
	2018 Secured Loan Facilities because of the lenders'

3 "Rights Entitlements" means the "nil-paid" provisional allotment of Rights Units to Eligible Unitholders under the Rights

Issue.

3

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, EUROPEAN ECONOMIC AREA, THE UNITED KINDGOM, CANADA, JAPAN OR AUSTRALIA

concerns over the uncertainty relating to the valuations and cash flows of First REIT's assets and the potential negative impact of any master lease restructuring. It is a condition of the Refinancing Facility that First REIT undertakes an equity fund raising exercise to repay the difference between S$400 million and S$260 million, being S$140 million. The Manager intends to finance the S$140 million from the Rights Issue.

First REIT is therefore carrying out the Rights Issue for the purposes of, among others, repayment of part of the 2018 Secured Loan Facilities to complete the refinancing exercise and avoid an imminent default of the S$195.5 million repayment obligation on 1 March 2021, master lease restructuring costs, as well as for working capital purposes.

2.2 Use of Proceeds

The Rights Issue will raise gross proceeds of approximately S$158.2 million, with the net proceeds of the Rights Issue, being the gross proceeds of the Rights Issue less the estimated fees and expenses (including professional and other fees and expenses) of approximately S$5.5 million incurred or to be incurred in connection with the Rights Issue, estimated to be approximately S$152.7 million. The Manager intends to use the gross proceeds from the Rights Issue as follows:

1. approximately S$140.0 million (which is equivalent to 88.5% of the gross proceeds of the Rights Issue) to repay part of the 2018 Secured Loan Facilities;
2. approximately S$5.5 million (which is equivalent to 3.5% of the gross proceeds of the Rights Issue) for the estimated professional and other fees to be incurred by First REIT in connection with the Rights Issue;
3. approximately S$3.4 million (which is equivalent to 2.1% of the gross proceeds of the Rights Issue) for master lease restructuring costs; and
4. approximately S$9.3 million (which is equivalent to 5.9% of the gross proceeds of the Right Issue) for working capital of First REIT.

Pending deployment, the net proceeds from the Rights Issue may be deposited with banks and/or financial institutions, or used for any other purpose on a short-term basis as the Manager may, in its absolute discretion, deem fit.

The Manager will make periodic announcements via SGXNET4 on the utilisation of the net proceeds from the Rights Issue as and when such funds are materially disbursed and whether such a use is in accordance with the stated use and in accordance with the percentage allocated. The Manager will also provide a status report on the use of the net proceeds from the Rights Issue in the annual reports of First REIT. Where there is any material deviation from the stated use of proceeds, the Manager will announce the reasons for such deviation.

2.3 Irrevocable Undertakings

2.3.1 Commitment by First REIT Management Limited (in its own capacity)

To demonstrate its support for First REIT and the Rights Issue, FRML, which owned

4 An internet-based corporate announcement submission system maintained by the SGX-ST.

4