The manager of First Real Estate Investment Trust (First Reit) has announced a proposed rights issue to raise gross proceeds of around S$158.2 million, which it said was "critical" for the Reit to meet its debt covenants, and avoid an imminent default of 39.8 per cent of total debt due on March 1 next year.

According to an exchange filing on Monday, the manager is proposing to issue around 791.1 million units, which represents around 98 per cent of the total units in issue as at Dec 23, 2020. The renounceable rights issue will be on a pro rata basis of 98 rights units for every 100 existing units, at an indicative issue price of 20 Singapore cents per rights unit.