Suntec REIT unit injects $40m into Harmony Investors Group Limited

This increases its shares to approximately 57.9%.

Suntec Real Estate Investment Trust’s (Suntec REIT) wholly-owned subsidiary, Suntec Harmony has subscribed for new ordinary shares in Harmony Investors Group Limited (HIGL) for $40m, according to an announcement.

HIGL indirectly holds Suntec International Convention and Exhibition Centre, which has been temporarily closed till 2 August. The subscription is directly and indirectly made through Harmony Partners Investments Limited (HPIL).

Prior to the subscription, Suntec REIT had an aggregate effective interest of 60.8% in HIGL, with Suntec Harmony holding 20% of HIGL and 51% of HPIL, and HPIL in turn holding 80% of HIGL.

To fund the business needs of Suntec Singapore, HIGL has issued an equity call notice to its shareholders, Suntec Harmony and HPIL. HPIL then issued an equity call notice to its own shareholders, including Suntec Harmony, in order to fund its portion of HIGL’s equity call.

The other shareholder of HPIL did not subscribe for its portion of the equity call; thus, Suntec REIT, through Suntec Harmony, subscribed for the other shareholder’s portion of the equity call, increasing its shares in HPIL to approximately 57.9% and its aggregate effective interest to approximately 66.3%.

The purpose of the capital injection is to support Suntec Singapore in the face of challenges to the meetings, incentives, conventions, and exhibitions (MICE) industry in Singapore due to the pandemic. International and large-scale trade fairs are impacted by travel restrictions, whilst smaller-scale meetings and events are also affected by safe distancing measures.

The temporary closure of the convention and exhibition centre may be extended if mandated measures are prolonged. Suntec REIT’s manager notes that the recovery will be slow in 2020, led by smaller-scale events, meetings and consumer shows when current measures on safe distancing are eased, whilst international conventions and events will remain weak due to slower recovery in international travel.