Potential purchasers of EC World Reit's interest in all its properties backs out

A CONSORTIUM of purchasers looking into buying over all of EC World Reit's interest in all of its properties has backed out, the real estate investment trust's (Reit) manager announced in a bourse filing on Tuesday (Dec 28) night.

Without naming the potential buyers, it said the deal fell through when the parties were finalising the definitive terms and conditions of the potential transaction.

These included fixing the purchase consideration based on the relevant offshore currencies to safeguard EC World Reit against fluctuations between renminbi and Singapore or US dollars, the currencies in which offshore loans of the Reit are denominated.

The consortium had decided not to proceed as the bases on which it had approached the Reit's manager in relation to the potential transaction "have changed significantly", it stated.

"The purchasers have informed the manager that, in view of the current market conditions and the fluctuations in exchange rate between the renminbi and Singapore dollars/US dollars, they have decided not to proceed with the potential transaction," the manager added.

EC World Reit, which specialises in Chinese logistics properties, had first announced that the deal was on the table on May 17.

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At the time, its manager had said that it was approached by Forchn International, the overseas headquarters of Shanghai-based investment holding company Forchn Holdings, which is also the Reit's sponsor, on the potential transaction.

It added that the deal "may or may not lead to the divestment" of its properties.

Forchn International was leading discussions on behalf of the consortium.

A day after it was announced, RHB had upgraded its call on the stock from "neutral" to "trading buy" with a higher target price of S$0.83, from S$0.76.

The brokerage said at that time that the potential deal could be a potential takeover offer, adding that the Reit is an ideal acquisition target for funds looking for stable recurring income due to its high FY2021 dividend forecast of 7.6 per cent and logistics-focused portfolio.

On Tuesday, the manager of EC World Reit noted that the non-occurrence of the deal "will not have any material adverse impact" on the Reit's consolidated net asset value or distributions per unit for the financial year ending Dec 31, 2021.

The manager added that it "remains committed to exploring new opportunities" to enhance the long-term value of EC World Reit for unitholders and stakeholders.

Units of EC World Reit BWCU : BWCU 0%closed down 0.6 per cent or 0.5 Singapore cent at S$0.80 on Tuesday.

READ MORE: 

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