HSBC Institutional Trust, the trustee of Sabana Industrial REIT, says it has identified and executed letters of intent with candidates whom it intends to propose as directors and senior management of the REIT’s new internal manager.
The trustee is also progressing work on the application of a capital markets services licence for the new internal manager.
In its updated internalisation timeline published along with its Aug 5 announcement, the REIT’s trustee says it intends to establish personnel for the new internal manager by the 4Q2024. It also plans to establish the budget and operating plan for the new internal manager by then. A draft of the budget and operating plan has already been created and will be presented to the new board of directors and senior management following their appointment and, or commencement of their employment.
An extraordinary general meeting (EGM) has already been scheduled for Aug 6 to consider the necessary amendments to the trust deed to effect the internalisation. A further EGM will be required if the fourth resolution of the Aug 6 EGM passes. The resolution is for the trustee to, among others, “put up each director individually for the endorsement of unitholders after they are appointed; and remove any director who is not endorsed by unitholders with immediate effect”.
So far, the costs to internalise the REIT manager has come up to some $8.92 million from Jan 1 to June 30 this year.
Of the amount, $1.38 million was incurred by relevant service providers in considering and responding to correspondence and proposals from certain unitholders in relation to the internalisation. Another $1.11 million of expenses was made by the trustee and manager for the Order 32 application and ESR appeal to obtain “the necessary clarity and guidance” from the court where there were different views among the unitholders on issues that are fundamental to the progress of the internalisation. Order 32 application refers to the trustee’s originating application on Jan 9, under Order 32 of the Rules of Court 2021 of Singapore. The application was to clarify the necessary issues and steps needed for the internalisation process and to ensure that the views of all unitholders were to be considered in an appropriate forum.
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Finally, about $1.37 million of costs were incurred due to the pre-internalisation activities, including the legal costs incurred by the manager and trustee in preparing for the EGM on Aug 7, 2023.
As at 1.43pm, units in Sabana REIT are trading 0.5 cents lower or 1.49% down at 33 cents.
