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Sabana's scheme meeting set for Dec 4; managers emphasise that 'bigger is better'
SABANA Shari'ah Compliant Industrial Real Estate Investment Trust (Sabana Reit) will be going ahead with its scheme meeting on Dec 4 for unitholders to vote on the proposed merger with ESR-Reit, said chief executive of the manager Donald Han in a media call on Thursday.
This is in response to queries posed about the requisition notice made by fund managers Quarz Capital and Black Crane Capital on Tuesday for Sabana Reit's board to convene an extraordinary general meeting (EGM), proposing five resolutions for unitholders to vote on.
"We're taking that letter very seriously and are seeking advice from our advisers. In the meantime, we are continuing the process for the proposed merger as we believe (that) all unitholders, not just one or two, should have the chance to make their own decision on the transaction and vote accordingly," said Mr Han.
Unitholders of Sabana Reit must pre-register for next month's scheme meeting and vote on the scheme resolution by the afternoon of Dec 1.
ESR-Reit's EGM will also be held on Dec 4, and unitholders will only be able to vote on two resolutions - one of which being the merger - at the EGM by appointing the chairman of the EGM as proxy to vote on their behalf.
Similarly, registration must be done by the morning of Dec 1; proxy forms will also have to be submitted by then.
During the call, Mr Han and Adrian Chui, chief executive of ESR-Reit's management team, in making the case for the merger, repeatedly emphasised how "bigger is better" in the Reit space.
Should the merger go through, Mr Chui said the enlarged Reit would stand a better chance of being included in key indices, which could open up more opportunities such as access to a larger and wider pool of capital, lower costs of funding, and higher trading liquidity.
He added that it will also allow Sabana Reit to be "unencumbered", as the enlarged Reit's debt will be on an unsecured basis, and provide a larger debt headroom for redevelopments and asset-enhancement initiatives.
Mr Han noted that while Sabana Reit can "definitely survive as a standalone entity", it will face "many difficulties and constraints" due to its small size and asset base, especially amid the current business environment.
As for questions surrounding the independence of Ng Shin Ein, who is an independent non-executive director of the manager, he reiterated that her independence has been "thoroughly evaluated".