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First Reit receives non-binding proposal on rental restructuring from Lippo Karawaci
FIRST Reit's manager said on Sunday that it has a received a non-binding proposal regarding a proposed rental restructuring from former parent company PT Lippo Karawaci Tbk.
The manager has set up an independent board committee comprising all the independent directors of the board - Chan Pengee Adrian, Ferris Charles Bye, Tan Chuan Lye and Martin Lechner - to evaluate the proposal.
The manager said that the independent committee will aim to achieve a maximisation of sustainable rents to provide long-term certainty to First Reit. The manager also intends to appoint a major international financial institution as financial adviser to the manager in connection with the restructuring discussions, and will make an announcement once the appointment is made. No agreement has been reached in respect of any rental restructuring, it said.
The committee will appoint an independent financial adviser (IFA) in due course, to provide advice as to whether any proposed rental restructuring would be on normal commercial terms and not prejudicial to the interests of First Reit and its minority unitholders. If required, a circular will also be despatched to unitholders to seek approval on any proposed rental restructuring. The circular will contain the opinion of the IFA and the pro forma financial impact of the rental restructuring, said the Reit manager.
Separately, as part of its ongoing capital management review process which includes reviewing refinancing plans for the debt of approximately S$196 million coming due in the first quarter of 2021, First Reit's manager said that it is in discussions with its lenders and is reviewing all options available to effect a sustainable capital structure after taking into account the potential impact of any proposed rental restructuring.