Dual-listed Fortune Reit to delist from Singapore Exchange
Singapore
HONG Kong and Singapore dual-listed Fortune Reit will delist from the mainboard of the Singapore Exchange (SGX).
In a bourse filing on Wednesday, its manager ARA Asset Management cited overheads, cost of compliance and low trading volumes in Singapore as reasons for the move.
The manager also disclosed that SGX has no objection to the delisting, as long as the Reit bears costs such as the fees for the unit-transfer process and observes a three-month notice period before the date of the delisting.
Fortune Reit has also already applied for - and received - in-principle approval from the Monetary Authority of Singapore (MAS) to withdraw its authorisation as a collective investment scheme here.
The Reit is now primarily listed in Hong Kong and secondarily in Singapore, following a December 2015 conversion exercise of its listing status from a primary listing in Singapore.
ARA Asset Management said it believes the delisting from SGX will enable Fortune Reit to "streamline its compliance obligations and reduce its legal and compliance costs which ultimately have to be borne by unit-holders of Fortune Reit".
The move will also pave the way for the Reit to "focus its resources on its business operations", it said.
The manager noted the "continuous migration of unit-holders from Singapore to Hong Kong" since that conversion in 2015.
As at Wednesday, there were 374.9 million units listed on SGX, comprising 19.4 per cent of Fortune Reit's total units in issue.
Trading volume in Hong Kong "significantly exceeds" that of SGX's, ARA Asset Management said.
The average daily trading volume between June 2018 and May 2019 was approximately 2.4 million units on the Stock Exchange of Hong Kong (HKEX), compared to about 62,000 in Singapore.
The manager said consolidating trading in Hong Kong will increase liquidity and improve the effectiveness of future capital-raising efforts.
And Fortune Reit now has a closer nexus to Hong Kong, it added: All its properties are in Hong Kong; the unit price is quoted in Hong Kong dollars on both the Hong Kong and Singapore bourses.
"Fortune Reit's primary listing on the HKEX is sufficient for its future debt and equity fund-raising requirements to meet its operations needs and future development."
The total number of units in issue will stay unchanged, and unit-holders' voting rights and entitlement to distributions attached to the units in issue will not be affected by the transition as a result of the delisting.
Central Depository (CDP) depositors who do not request for a designated broker transfer within the unit transfer period, and/or those who take no action within the transfer period and still have units with the CDP by the delisting date will have their units withdrawn from the CDP.
They will be issued physical unit certificates and their names will be entered into Fortune Reit's Hong Kong unit register as holders of units. Such depositors will have to make their own arrangements to lodge their units with the Central Clearing and Settlement System at their own cost or with securities brokers.
Fortune Reit closed flat at HK$10.60 (S$1.85) on Wednesday before the announcement.
