EC World Reit down 10.9% on uncertainty over loan refinancing

Singapore

UNITS of EC World real estate investment trust saw massive sell-offs on Friday (Apr 8), with its unit price closing at S$0.655, down S$0.08 or 10.9 per cent, over uncertainties on its ability to refinance its loans.

The counter plunged to a low of S$0.645, down as much as 12.2 per cent at 3.11 pm, with over 10.2 million securities changing hands.

The last time it hit such low levels was in August 2020.

The sell-off started right after market opened, and continued throughout the day, with EC World Reit's unit price dropping by as much as 6.8 per cent within the first 2 hours of trading on Friday.

No married deals were recorded, according to ShareInvestor data.

The Reit's manager had said in a bourse filing after market hours on Thursday that the refinancing exercise for all onshore and offshore term loans due in 2022 is in the final stages of negotiation, and believes the Reit can continue operating as a going concern.

It was responding to queries from the Singapore Exchange, which noted that EC World Reit's auditors PwC had highlighted a material uncertainty in its FY2021 financial statements on Reit's ability to continue as a going concern.

Its manager said the uncertainty arose because the refinancing of loans, due for repayment in May and July 2022, were not completed at the time of the issuance of the financial statements.

The financials therefore reflected that the Reit's current liabilities exceed its current assets.

The Reit's management said it is confident that the refinancing exercise would be successfully completed prior to the maturity dates of the term loans.