Sabana Reit trustee sets up internalisation committee with Quarz Capital staff among members

THE trustee of Sabana Industrial Real Estate Investment Trust : M1GU 0% (Sabana Reit) has established an internalisation committee including several employees from activist investor Quarz Capital.

This was among several moves the trustee has made to prod along the internalisation of the Reit manager.

Giving an update to unitholders on Friday (Mar 22) evening, the trustee – HSBC Institutional Trust Services (Singapore) – said it is working with the relevant parties to implement the resolutions passed at the last extraordinary general meeting (EGM) held on Mar 8.

It added that it has identified the necessary steps to implement the said resolutions and is reviewing the impact that these resolutions have, or may have, on existing workstreams for the internalisation process.

Unitholders of Sabana Reit had voted for eight out of the 10 resolutions proposed by Quarz Capital, which relate to how the trustee should handle the internalisation of Sabana Reit.

The Sabana Growth Internalisation Committee, which was set up by unitholders including Quarz, first requisitioned for an EGM last December to direct the trustee on the internalisation process. It said then that unitholders were highly dissatisfied and concerned about the trustee’s lack of progress on the process.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

The resolutions that unitholders were in favour of included directing the trustee to form an internalisation committee which includes several Quarz employees. Another resolution called for a maximum price of S$10 million to acquire the existing external manager within a month of the EGM.

The unsuccessful resolutions related to the trustee being directed to provide written updates on the internalisation process every month, and for the trustee to disclose correspondence and a summary of the matters discussed with each owner or beneficiary of the Sabana Reit manager.

In its update, the trustee said that it has written to ESR Group – owner of the Reit manager – to seek its views on whether it would be willing to consider the acquisition of the manager for a maximum all-in purchase price of not more than S$10 million.

But, as of Mar 21, the trustee has not received a response from ESR Group. The trustee will thus keep unitholders updated if there are material developments.

The trustee has also made progress on the resolution to establish an internalisation committee. It was set up on Mar 21, with members Imran Chng Pia Ser, Lim Hock Chuan, Havard Chi Cher Pan, Low Chin Yee, Jan Frederic Moermann and Sasha Anshuman Manabendranath.

The trustee has contacted the committee members and a meeting has been set for Mar 25 to discuss the internalisation process, among other matters. Details of the initial meeting will be shared with unitholders.

The trustee has also written to the Monetary Authority of Singapore and the Singapore Exchange to seek guidance on the issue of whether the manager, its shareholders, and related parties ought to be permitted to vote on any resolution to amend the trust deed.

It also intends to amend its originating application, filed on Jan 9, to seek the court’s guidance on this issue, as well as to modify and update the proposed amendments to the trust deed.

Aside from the resolutions, HSBC Institutional Trust Services has also made progress on other existing internalisation workstreams. This includes identifying a list of qualified candidates to put forth as directors of the new internalised manager.

Units of Sabana Reit closed flat at S$0.365 on Friday, before the announcement.