Passing of Quarz' resolution does not result in the internalisation of Sabana REIT's management: ESR Group

Sabana REIT will hold an EGM on Quarz' two resolutions on 7 August.

ESR Group, in a letter to Sabana REIT's unit holders, clarified that the passage of the second resolution proposed by Quarz will not automatically result in the internalisation of Sabana REIT’s management.

Citing its Trustee, the group underscored that an “internalised management structure that does not currently exist will need to be identified, established and then approved by unitholders.”

The group added that Sabana REIT has to hold two or more EGMs to seek its unitholders’ directions to carry out Quarz’ proposed resolutions.

“The Trustee has warned that in the event that these later resolutions do not pass or the necessary regulatory approvals are not obtained, which means that internalisation cannot be realised, the Trustee will ‘assess all options...including the options of an orderly winding-up of Sabana REIT’,” wrote the group.

“It should now be clear to Unitholders that the passing of Resolution 2 only means that the Trustee is directed to take steps, including engaging advisers, on the process for internalisation. This is only logical where there is no clear proposal from Quarz on the way forward. There is no existing blueprint for an internalised management structure for S-REITs,” the group added.

ESR Group also slammed Quarz, saying that its “rally cry that passing its second resolution necessarily results in the internalisation of the management function of Sabana REIT wilfully ignores all the known and unknown hurdles that stand in the way of internalisation.”

Meanwhile, the group urged Sabana REIT's unitholders anew to vote against the two resolutions proposed by Quarz.

“The future of Sabana REIT has been thrown up in the air, at the instigation of requisitionists whose proposals are, in the words of the Sabana Manager, ‘incomplete, lack clarity and fail to outline the many inherent risks’,” the group said.

“ESR urges Unitholders to restore certainty and stability to the Sabana REIT,” it added.