Dasin Retail Trust’s talks with ‘reputable Chinese entity’ for potential MOU fall through
Daphne Yow
CHINA-focused property trust Dasin Retail Trust ’s move to restructure its loan maturities has hit a speed bump after talks for a potential memorandum of understanding (MOU) with a “reputable Chinese entity” fell through, the trustee-manager said on Thursday (Jul 6).
This comes after a representative of the trust’s major unitholder said transactions proposed by the MOU were “illegal under Chinese law” at a Jun 28 meeting.
The “reputable Chinese entity” also expressed dissatisfaction at recent actions taken by Zhang Zhencheng, a substantial unitholder of Dasin Retail Trust, as it viewed the actions as detrimental to the MOU.
The entity therefore said it would not be proceeding further with the MOU and will cease negotiations on it.
Zhang is currently suing Tan Huay Lim, the trustee-manager’s lead independent director, on allegations that Tan’s conduct has been “oppressive” and “in disregard” to Zhang’s interests.
Some of Dasin Retail Trust’s existing lenders have “expressed great displeasure” regarding the litigation and are requesting that it be discontinued, as they believe it has a “destabilising effect” on the trustee-manager’s efforts at restructuring.
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A debt-restructuring term sheet sought by the trust’s lenders, which was a condition precedent for the MOU, also emerged as a point of contention in negotiations over the past weeks.
Lenders said the trustee-manager’s chief executive, Wang Qiu, had yet to provide the board with a finalised version of the term sheet, despite having actively participated in debating it.
This came as a “shock” to some lenders who believed the finalised term sheet, dated May 22 this year, was already ratified by the board – and put the document through their respective internal channels for approval.
Based on letters received by Dasin Retail Trust’s board, the matter has fuelled concerns among the lenders on whether Wang had been “acting in the interests of all stakeholders including the lenders, and if conflicts of interest are being managed appropriately”.
They have since requested the board to review the conduct of Wang.
Lenders also expressed “disappointment” at the Jun 28 meeting outcome and said they would wait for a formal response from the board before embarking on any further discussions on the trust’s debt restructuring exercise.
Meanwhile, Dasin Retail Trust’s board said it will continue to explore available options related to its restructuring exercise with these lenders.
Dasin Retail Trust’s portfolio includes retail malls in China, such as Ocean Metro Mall in Zhongshan.
The trustee-manager on Wednesday lifted a trading halt called on Jul 3. The counter last traded at S$0.125 on Jun 30.
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