Urban Commons, the Los Angeles-based sponsor of Eagle Hospitality Trust (EHT) is seeking the trust to reconsider its decision to deny unitholders the request to hold another extraordinary general meeting (EGM).
The meeting would have allowed unitholders to vote on a rights issue and proposal to retain or reappoint the current manager of Eagle Hospitality REIT (EH-REIT).
On Dec 23, EHT informed SGX that the managers and REIT trustee understand that the appeal by Mandarin West Holdings against the direction of the Monetary Authority of Singapore (MAS) has not been accepted by the central bank.
Mandarin West Holdings is the shareholder of the REIT manager, which is in turn owned by the sponsor.
Accordingly, the trustee "wishes to reiterate that it intends to comply with MAS's direction and will remove the REIT manager as manager of EH-REIT within the stipulated deadline".
Unitholders of a publicly listed company in Singapore have the right to request the board of directors to convene a further EGM should they see fit.
“The whole point of an EGM is to allow unitholders to vote on key issues that require their approval. It is the unitholders who own shares in EHT, and they are the most appropriate persons to decide what is in their best interests. Operational uncertainties are not grounds for rejecting a request to call for a further EGM,” says Howard Wu, founder and principal at Urban Commons.
“UC’s proposal includes the elements of a cash injection, refinancing plan, and several amicable resolutions which many major unitholders supported. SC Capital’s proposal, on the other hand, was chosen without considering the potential risks and implications which will not benefit the unitholders. We strongly urge all interested parties to give us a chance to work together to resolve the outstanding issues for the good of all unitholders,” he adds.
The sponsor’s blueprint for the REIT will focus on refinancing the defaulted debt in the quickest amount of time, raise the minimum amount to sustain the REIT and to minimise dilutions to unitholders, and to come up with “amicable solution” to restart and sustain the REIT’s operations, says Urban Commons in a Dec 24 statement.
See: Urban Commons tries to win investors' trust after defaulting while SCCPRE awaits EGM vote on Dec 30 and EHT sponsor expresses doubt over SC Capital's proposal to replace existing REIT manager