The manager of EC World REIT BWCU has decided to suspend the trading of its units on a voluntary basis while it seeks to settle its financing obligations.
“The board is in the process of evaluating various options for EC World REIT and will provide unitholders with a further update as and when there are material developments,” reads the statement put out by the REIT manager on the evening of Aug 30.
On Aug 28, the manager said that it would not be able to fully repay the offshore interest expenses that were due on Aug 31.
Under the terms of the offshore facilities, the offshore interest reserve maintained by the REIT and its subsidiaries must be topped up within five business days from Aug 28. At the time, the REIT manager indicated that it would be “challenging” for the REIT to do so given its financial position. The failure to pay the interest which is due would result in an event of default under the offshore facilities. It would also trigger a cross-default under the REIT’s existing onshore facilities.
Should an event of default continue, the relevant lenders may “accelerate the facilities”.
According to the REIT, its manager has asked the facility agent under the offshore facilities to release part of the offshore interest reserve in order to enable the REIT to fully repay the offshore interest expenses. It has also requested for an extension to top up the offshore interest reserve.
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In addition, the manager has requested that the lenders not accelerate the facilities pending the latter’s evaluation of the requests.
As at Aug 30, the lenders are still in the process of reviewing the request.
As at June 30, the REIT has current assets of $548.98 million and current liabilities of $682.17 million. Within its current liabilities, the REIT has borrowings of $133.19 million, which are due for repayment within the next 12 months.
Units in EC World REIT last traded at 28 cents.
