Sabana REIT refutes claims bond issuance affects its internalisation process

Quarz Capital Asia alleged the bond issuance may jeopardise Sabana Industrial REIT financially.

Sabana Industrial REIT's planned bond issuance will not affect the internalisation process of its management, according to its manager, Sabana Real Estate Investment Management.

Quarz Capital Asia, in a letter dated 14 June, said the bond issuance lacks urgency and could complicate the REIT's ongoing management internalisation process, potentially benefiting current management at the expense of shareholders.

Sabana's manager and trustee clarified that the bond issuance, initiated in June 2022, is crucial for the REIT's operational stability and to mitigate refinancing risks. They emphasised that these efforts align with their fiduciary duties to safeguard Unitholders' interests.

“Contrary to Quarz’s allegation that the Bond Issuance may put Sabana Industrial REIT in “financial jeopardy”, such refinancing exercise is essential to the capital management planning for the Sabana Industrial REIT,” it said.

“It is part of the role and responsibility of a responsible REIT manager to ensure that Sabana Industrial REIT continues to operate on a sound footing pending the completion of the Internalisation Exercise, the timing of the conclusion, of which, remains uncertain,” the statement added.