Dasin Retail Trust lender says internalisation of trustee-manager could delay debt restructuring

Minority investors tout the internalisation as cost-saving which could push distributions higher.

One of the lenders of Dasin Retail Trust has raised concerns over potential delays in its debt restructuring if they proceed with the requisition to internalise its trustee-manager, according to a regulatory filing on 4 December.

An onshore lender has “expressed concern that the restructuring may be further protracted” should the proposed internationalisation go through, the trustee-manager said in its latest update. 

The trustee-manager reiterated that the “requisition notice will be considered in full by the board after the unitholding of the requisitionists and the validity of the requisition notice has been verified and confirmed.”

Last month, a group of minority shareholders holding more than 10% of the units in the trust asked to convene an extraordinary general meeting to vote on their proposal to remove the incumbent external trustee-manager, Dasin Retail Trust Management. It will then be replaced with a newly set-up internal trustee-manager, which will be beneficially owned by the unitholders from time to time.

The internalisation is expected to eventually reduce costs since there will no longer be any incentive to maximise management fees, which could lead to higher distributions for the unitholders.

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In the 4 December filing, Dasin Retail Trust’s manager also gave lenders an update on its ongoing restructuring efforts, including the pre-approval it secured from the trust’s single largest controlling unitholder, Zhang Zhencheng, regarding the sale of retail malls. 

Lenders had considered these pre-approvals as a deal-breaker in the debt restructuring. JLL, one of the appointed agents to market the properties, said “few potential investors” have shown interest in the properties.