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Sabana REIT trustee says it intends to call EGM to consider amendments to trust deed

Felicia Tan
Felicia Tan • 3 min read
Sabana REIT trustee says it intends to call EGM to consider amendments to trust deed
NTP, one of Sabana REIT's properties. Photo: Sabana REIT
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HSBC Institutional Trust, the trustee of Sabana Industrial REIT, says it has established a new wholly-owned entity for the purposes of acting as the new internalised manager.

In a June 12 statement, the trustee adds that it is progressing the remaining outstanding workstreams which include identifying and engaging with a list of qualified candidates for the new internalised manager, formulating a funding and operational model as well as progressing work on the application for a capital markets services license for the new internalised manager.

However, it warned that “perceived uncertainties” as to how the internalisation will be concluded, including “publicly expressed contrary views by various parties”, could lead to difficulties in securing suitable candidates for the new internalised manager.

“While the trustee and its advisors continue to progress this workstream, this remains one of the key risks to the internalisation timeline,” reads the latest statement by the trustee.

On June 6, the five unitholders of Sabana REIT who have requested the REIT manager to convene an extraordinary general meeting (EGM), alleged that some of the REIT manager’s directors have “chosen to significantly delay the internalisation process… by ignoring unitholders’ amendments to the resolutions on May 29 and not proceeding with the EGM requisitioned on March 25”.

The June 6 letter came after Sabana REIT said that the EGM requisitioned by the same unitholders will not proceed after the unitholders proposed “entirely new and different” resolutions, which amount to a withdrawal of the requisition notice.

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In the unitholders’ letter, they add that the High Court only instructed a postponement of the EGM and not a cancellation, which was done by the directors of the REIT manager.

“The directors chose to significantly delay and impede the internalisation process by not proceeding with the EGM despite unitholders’ amended resolutions on May 29 being similar in substance to the previous resolutions, which pertain to the amendment of the trust deed clause 16.4 and expediting the internalisation process,” reads part of the letter.

The letter then continues to say that the directors’ actions are “in conflict” with the Monetary Authority of Singapore (MAS), which has “provided various waivers and regulatory clarifications to support the internalisation”. Their actions were also said to be in conflict with their statutory duties and with the trustee.

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The REIT’s trustee also announced, on June 12, that it may convene an EGM to consider the amendments to the trustee. It adds that its proposed amendments to clause 16.4 of the trust deed are “necessary” to effect the internalisation.

The trustee also said that the REIT manager is in the process of considering the latest requisitioned resolutions and is seeking legal advice.

Should an EGM be convened, the trustee will try to table other resolutions that are relevant to the internalisation, including the latest requisitioned resolutions.

As at 9.11am, units in Sabana REIT are trading 0.5 cents higher or 1.43% up at 35.5 cents.

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