Sabana unitholder ESR Group releases open letter amidst Quarz issue

ESR Group wants to establish some considerations before the unitholder's resolutions.

After the current situation with Sabana REIT and investor, Quarz Capital, ESR Group released an open letter to all its unitholders.

The letter stemmed from Sabana REIT’s criticisms versus Quartz Capital’s resolutions. Quartz Capital was pushing for its proposal for Sabana to practice an internalisation of the Reit manager. 

In light of the serious adverse consequences of the Proposed Actions that would result in value destruction for Unitholders, ESR Group, unitholder of Sabana REIT, wants to put in place some considerations before putting the resolutions to unitholders to vote:

1. the proposed new management team and board of directors of the internal Manager
2. (D) CMS Licence approval from the MAS for the Internal Manager, including the new management team and board of directors;
3. a committed refinancing plan that is comprehensive and credible; and
4. full and proper disclosures on the potential risks, considerations and implications of the Proposed Actions (after taking into account the input from the Sabana Trustee and Sabana REIT's lenders), in order for (i) Unitholders to make an informed decision, and (ji) the management team and board of directors of the Sabana Manager to discharge their fiduciary duties per the SFA.

ESR Group said they do not propose to comment on the motivation of Quarz in the requisition of “the proposed EGM to table the Resolutions, save to say that the Requisition Letter contains, inter alia, numerous false and inaccurate statements.” 

“We reserve our position on those issues. However, at this juncture, we must clarify that while much ado has been made about our interest in the Sabana Manager, ES is the single largest Unitholder holding a substantial interest in Sabana REIT, and the value of our Sabana REIT unitholdings far outweighs the value of our investment in the Sabana Manager,” read the statement.

“As such, there is no reason for ESR to prioritise and protect the value of our stake in the Sabana Manager, at the expense of or to the detriment of Sabana REIT,” it added.

In closing, ESR said it strongly urges all unitholders to carefully consider the concerns that we have raised in this letter, and make a considered and informed decision on the resolutions.