THE manager of Lippo Malls Indonesia Retail Trust (LMIRT) announced on Monday (Mar 20) that it will not pay its distribution, originally scheduled on Mar 27, to holders of its S$140 million perpetual securities issued in September 2016.

It said in a bourse filing that the issuer has no obligation to pay the March 2023 distribution and the unpaid sum is noncumulative and does not accrue distribution. 

Unit holders of LMIRT, as well as those who bought its June 2017 perpetual securities worth S$120 million, are also at risk of not receiving any payments from the issuer.

LMIRT’s manager said that it will apply the dividend stopper provision arising out of its discretion in stopping the March 2023 distribution of its 2016 perpetual securities, and not declare or pay any dividends or distribution on its units or the 2017 perpetual securities.

The issuer will also not redeem, reduce, cancel, buy-back or acquire any units or any of the 2017 perpetual securities.

The announcement by LMIRT comes after two rating agencies, Moody’s and Fitch, downgraded its ratings for the issuer, citing its refinancing risk.

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Units of LMIRT closed at S$0.022, down 4.4 per cent or S$0.001 on Monday.