DBS Trustee will uphold its legal, regulatory obligations

WE REFER to the article "Could DBS Trustee have done more for EHT unitholders?" published in the Hock Lock Siew column in The Business Times on April 22, 2020. The article is misconceived in stating that DBS Trustee seems to have been "negligent" and we would like to clarify a trustee's duties at law and in contract. DBS Trustee will always uphold its legal and regulatory obligations and act in the best interests of unitholders and holders of stapled securities.

The day-to-day operations of Reits are not managed by trustees but by the Reit manager. The trustee's obligation (in the context of Reits) applies to budget approval and compliance, reviewing financial reports, arrears reports and ensuring good title and insurance to assets. This is true of trustees in all real estate investment structures and was no different for Eagle Hospitality Real Estate Investment Trust (EH-Reit).

An orderly resolution of the situation is in the best interests of all stapled security holders and the market, and this is the outcome that DBS Trustee is working towards.

Since being made aware of a notice of default and acceleration, FTI Consulting Inc has been appointed as the Chief Restructuring Officer and the Reit Manager and DBS Trustee have obtained temporary forbearance from the administrative agent and lenders.

Additional work is underway to ensure EH-Reit has the time it needs to restructure and to appoint a financial adviser to assist in the strategic review of EH-Reit.

In so doing, if DBS Trustee becomes aware of any inappropriate conduct or wrongdoing, DBS Trustee will not hesitate to take action to ensure the law is complied with and the interests of stapled security holders are preserved.

Soh Ee Fong MD and Head, DBS Trustee