Pros and cons of the distribution reinvestment plan

Goola Warden
Goola Warden5/18/2022 09:26 PM GMT+08  • 10 min read
Pros and cons of the distribution reinvestment plan
MINT's redevelopment of Kolam Ayer cluster into hi-tech buildings
Font Resizer
Share to WhatsappShare to FacebookShare to LinkedInMore Share
Scroll to top
Follow us on Facebook and join our Telegram channel for the latest updates.

On April 22, stapled security holders of CDL Hospitality Trusts (CDLHT) voted overwhelmingly to approve resolution 4, the implementation of a distribution reinvestment plan (DRP).

In a 24- page circular on the rationale for DRP, CDLHT’s manager said: “the cash which would otherwise have been payable by way of distributions may be retained for greater financial flexibility where the cash may be used to repay existing borrowings, which will further strengthen CDLHT’s balance sheet, or to fund the continuing growth and expansion of CDLHT.”

It adds: “[The DRP] will also enlarge CDLHT’s capital base, strengthen its working capital reserves and improve the liquidity of stapled securities.” Unitholders can opt for distributions in all cash, cash and units, or all units.

For more insights on corporate trends...
Sign In or Create an account to access our premium content.
Subscription Entitlements:
Less than $9 per month
Unlimited access to latest and premium articles
3 Simultaneous logins across all devices
Bonus unlimited access to online articles and virtual newspaper on The Edge Malaysia (single login)
Loading next article...
The Edge Singapore
Download The Edge Singapore App
Google playApple store play
Keep updated
Follow our social media
Subscribe to The Edge Singapore
Get credible investing ideas from our in-depth stock analysis, interviews with key executives, corporate movements coverage and their impact on the market.
© 2022 The Edge Publishing Pte Ltd. All rights reserved.
Unlock unlimited access to premium articles with less than $9 per month. Subscribe Now