Home News REITs

REIT Trustee says recovery of monies unlikely for Eagle Hospitality Trust’s minority investors

The Edge Singapore
The Edge Singapore 7/15/2021 8:14 PM GMT+08  • 3 min read
REIT Trustee says recovery of monies unlikely for Eagle Hospitality Trust’s minority investors
Eagle Hospitality Trust's investors are unlikely to get anything bank from Chapter 11 sales process
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.

An FAQ released by Eagle Hospitality Trust’s REIT trustee makes for painful reading. Most of it is a summary of the ill-fated stapled-security’s brief time as a listed entity on the Singapore Exchange. (EHT was a stapled security, comprising of an inactive business trust and EH-REIT.)

However, there are interesting snippets. The REIT Trustee confirms that minority stapled securityholders will most probably not be getting any of the Chapter 11 sale proceeds. “Even though results of the sale process for the sale of 14 of EHT’s properties yielded US$478.6 million in net proceeds, it is unlikely based on the debt profile of the Chapter 11 Entities, and subject to the claims resolution process, that claims of all unsecured creditors of the Chapter 11 Entities will be satisfied in full from the sale proceeds, after accounting for various secured claims. The sale proceeds are therefore not expected to result in a recovery for Stapled Securityholders.”

According to another question, EHT had US$89 million of cash in April 2020. What happened to the cash? The answer is telling on how irresponsible the sponsor - who was also the Master Lessee of EHT’s 18 properties - was. The cash, it appears, was used for various payments under the Master Lease Agreements which were not paid by the Master Lessees which was Urban Commons, the sponsor. Among other unpaid dues, these included real estate taxes and transient occupancy taxes, as well as penalties and interest; premiums for mandatory insurance; the need to defend against litigation brought against EHT in the US for various defaults and actions of the Master Lessees (ie Urban Commons); and funding of certain expenses related to the franchisors’ unpaid fees and expenses dating back to as early as 2019.

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.