Sabana Reit's trustee rejects suggestions that it was remiss in duties

Published Mon, Oct 19, 2020 · 09:50 PM

SABANA Reit's trustee HSBC Institutional Trust Services (Singapore) has said in a letter to unitholders that nothing suggests that the Sabana manager has breached or failed to comply with the relevant trust deed provisions with regard to the proposed merger of Sabana Reit and ESR-Reit.

In a filing on the Singapore Exchange (SGX) on Monday night, the trustee also wrote that there was nothing to intimate that the Sabana manager negotiated in a manner that suggested an actual conflict of interest.

The trustee's statement referred to letters on Sept 3 and Sept 29 from activist unitholders Quarz Capital Management and Black Crane Capital, which asked whether the manager had failed to follow the terms of the trust deed to the prejudice of participants, as well as the trustee's duty to Sabana Reit unitholders, in relation to the manager's potential conflicts of interests.

Quarz had opposed the planned deal since it was launched in July, on the grounds that ESR-Reit's implied offer price of 37.7 Singapore cents for each Sabana unit was too low.

The proposed merger has drawn an outcry that the sale of Sabana Reit's assets are below net asset value; there have also been accusations of conflicts of interest with ESR Cayman, as it owns substantial stakes in both ESR-Reit's and Sabana Reit's managers.

HSBC Institutional Trust Services (Singapore) said in its filing to SGX that the Sabana manager had, together with its financial advisors, taken part in extensive arm's-length negotiations, and provided corporate resolutions and other relevant documentation documenting its decision-making process and rationale for proceeding with the proposed merger.