Eagle Hospitality Trust redirects maiden distribution funds to critical expenses

Stapled securityholders will no longer receive the distribution announced for Q1.

Eagle Hospitality Trust (EHT) will be redirecting the funds intended for the maiden distribution to unitholders to fund its critical and portfolio preservation expenses, the company announced in an SGX filing.

This meant that stapled securityholder will no longer receive the distribution of $0.049 (US$0.03478) announced last 17 February.

Also read: SGX RegCo asks EHT to update and clarify on restructuring

“To preserve and protect the value of the properties under EHT, there is now the need to tap on the cash resources including the monies which were previously thought to be available to fund the Distribution.The cash resources which were available as at 17 February to fund the  Distribution,are  now  no  longer  available  as  they  have  to  be  used  urgently  to  fund necessary and critical expenses of EHT,” the company stated in the filing.

This was attributed to the continuing failure by the master lessee Urban Commons to discharge its obligations under the master lease agreements (MLA), as well as the continuing impact of COVID-19, said EHT.

EHT stated that there is currently no alternative source of funds to fund the portfolio preservation expenses.