Probably a dose of déjà vu, that is master leases, and capital management. The net asset value of EC World REIT as at end-2021 stood at 93 cents. Its unit price closed at 48 cents on June 30, 2022. That values EC World REIT at 0.51x NAV. The market capitalisation as at June 29 was $388 million based on units in issue of 809.49 million as stated in the 2021 annual report, The secured debt outstanding stood at $725 million as at Dec 31, 2021.
On June 29, the Singapore Exchange, questioned the REIT’s refinancing efforts following the latter’s announcements on June 1 and June 13. Why were the loan extensions for less than 12 months? Why are the lenders not financing beyond April 2023? Are there difficulties in obtaining onshore facilities?
Among the answers given, it turns out that the offshore lenders requested an undertaking when the manager was negotiating for the extension of the REIT’s offshore loans. “If at least 25% of the aggregate principal amount of the outstanding offshore fcilities is not repaid by 31 December 2022, EC World REIT faces an event of default which will trigger mandatory prepayment of the offshore facilities,” EC World REIT’s manager says.