Sabana unitholder is looking at a price discovery process with the intention to an asset sale

Sabana Industrial REIT's maanger announced on Jan 17 that it had announce that it has received a letter (the Requisition Notice) from several unitholders of Sabana Industrial REIT having an aggregate unitholding in Sabana Industrial REIT of more than 10%, requesting the Manager to convene an extraordinary general meeting of Sabana Industrial REIT to consider certain resolutions. The Requisition Notice was deposited at the registered office of the Manager on Jan 16. The Manager is considering the Requisition Notice, consulting with the Trustee and seeking legal advice. Further announcements will be made on SGXNET in due course, the announcement said. 

The requisisionist, Chan Wai Kheong, more well known as Charlie Chan, has proposed three ordinary resolutions. Resolution one is for the Trustee of Sabana REIT and its manager to undertake a sale discovery process for a majority of the assets in Sabana REIT. The second resolution is for the Trustee and Manager to appoint an internationally reputable firm of consultants to undertake the price discovery process with fees only on a success basis. Any reimbersable out-of-pocket monies should be no more than $8,000. Resolution three is for the Trustee and Manager to complete the price discovery process within three months of the resolutions being passed. 

Chan says: "I have gone public with my personal view and the view of a few other individual shareholders. I am willing to talk to anybody who cares to hear why I want to do this, including representatives from Quarz. I am trying to get the best returns for all of us. The assets will be valued on Dec 31, 2024, for the end-of-year valuation, and I have found realtors who will do this exercise on a success basis." 

Chan is unhappy that the Quarz Capital Asia has saddled the REIT with internalisation expenses of $10.19 million. The 3Q2924 business update says the manager and trustee have incurred $10.19 million in internalisation costs. "Given the cost incurred, approximaltely 10% of distributable income was retained for prudent capital management. Further retention may be required which will result in a reduction in DPU," Chan points out.