HSBC Trustee outlines course of action for Sabana REIT internalisation

It's concerned with the request for SREIM to convene an EGM for Sabana Industrial REIT.

Sabana Industrial REIT has shared a letter it received from HSBC Institutional Trust Services (Singapore) outlining its planned course of action should either of the two resolutions proposed by Quarz Capital Asia pass in an extraordinary general meeting (EGM) to be held in a future date.

Earlier, Quarz Capital Asia has requested for an EGM to address two ordinary resolutions: first, to remove the external manager, Sabana Real Estate Investment Management (SREIM); and to internalize operations. Internalisation involves several stages, including an EGM to modify the trust deed, which HSBC Trustee considers an extraordinary resolution.

HSBC Trustee’s letter highlighted the “potential risks and uncertainties associated with the implementation of the resolution(s)" and cautioned unitholders to carefully consider before casting their votes.

HSBC Trustee reminded unitholders that if the first of the two resolutions pass, it will have to remove SREIM as manager without a replacement manager having been identified.

Fees, costs, and expenses related to this removal will have to be taken out of Sabana REIT, the trustee added.

If the second resolution passes while the first does not, HSBC Trustee said that unitholders will have to approve and pass an internalised management structure that does not currently exist. This would take a considerable amount of time or at least 12 months, the trustee reminded unitholders, and will incur costs.

If any of the two resolutions pass, HSBC Trustee will also have to appoint professional advisers. These may include legal, financial, tax, property advisers, amongst others, with fees related to these taken out of Sabana REIT's assets.

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HSBC Trustee advised unitholders that it will hold an estimate two or more EGMs in the future to further seek their advice in how to carry out any of the resolutions that may be passed.