LMIRT manager denies request to postpone voting for acquisition of Lippo Mall Puri

THE manager of Lippo Malls Indonesia Retail Trust (LMIRT) will not be tabling an additional resolution at its extraordinary general meeting (EGM) on postponing voting for the proposed acquisition of Lippo Mall Puri, it said in an exchange filing on Monday.

Scheduled for Dec 14, the EGM was to seek approval for, among other things, the acquisition of Lippo Mall Puri.

The manager said that it received a letter on Friday from certain unitholders of LMIRT requesting an additional resolution be tabled to postpone the voting on the acquisition of Lippo Mall Puri to another EGM, at least three months from Dec 14.

The request had set out reasons for the proposed postponement, including alleged factual errors in the documentation, as well as disagreements by the unitholders on the valuation of the property.

In its response on Monday, the manager said the reasons given by the requisitionists for asking the EGM to be postponed are "without merit".

The unitholders had said that there appears to be many factual errors in documentation, and that the present tenant occupancy rate in Lippo Mall Puri is less than claimed.

A NEWSLETTER FOR YOU

Friday, 8.30 am

SGSME

Get updates on Singapore's SME community, along with profiles, news and tips.

Sign Up

In response, the directors of the manager refuted the allegations of factual errors, and highlighted valuation reports and details in the EGM circular of tenant changes in Lippo Mall Puri to state that there were no discrepancies to the occupancy rate.

The unitholders also said that in view of the Covid-19 pandemic, assumptions in the valuation approach did not seem justified. They added that there are no transactions by unrelated parties for Jakarta malls in the time of the pandemic, and "there appears to be offers by malls by Lippo competitors at offers of a much lower price".

The unitholders said it is prudent to do slightly more due diligence to buy the property at a "reasonable price". They intend to table their own property valuation, which is "more equitable and independent", as an agenda that all unitholders can vote on in the next EGM.

The manager noted that the impact of Covid-19 on the mall has been taken into account in the independent valuations by Cushman & Wakefield and Colliers. It said the property's 12.6 per cent decrease in valuation from Dec 31 2019 to June 30 this year is in line with a decline in valuations of similar properties in its portfolio.

It added that the appointed independent financial adviser KPMG Corporate Finance is of the opinion that the proposed acquisition, including vendor support agreement, is on normal commercial terms, and is not prejudicial to the interest of LMIRT and its minority unitholders.

"The manager is of the view that the purchase consideration is at a reasonable and attractive price and there is no merit to the requisitionists' argument to table their own property valuation," it said.

Apart from the reasons being "without merit", the manager also said that there is insufficient time for valid notice to be given to table the additional resolution, as at least 14 days notice to all unitholders is required for the EGM and the resolutions to be tabled.

The manager of LMIRT added that the intention to undertake the acquisition of Lippo Mall Puri was first announced as far back as March 2019, and that it has provided updates on the proposed acquisition and method of financing in subsequent announcements.

LMIRT previously announced that it is proposing to buy the strata title units of the mall in West Jakarta from its sponsor Lippo Karawaci for approximately S$336.5 million. The proposed acquisition will be financed through a combination of up to S$120 million in debt - comprising bank debt and a S$40 million loan facility from the seller - as well as a rights issue of 160 units for every 100 units to raise S$281 million.

Units of LMIRT were trading flat at 8.4 Singapore cents as at 1pm on Monday.