Sabana Shari'ah REIT

[ACTIVIST SPEAKS]

YOU ARE GOING TO THE MEETING!!!

SHARES IN CDP:    Bring along your Identification card/passport to vote.

SHARES IN CPF/SRS:   (NEW)  Bring along your Identification card/passport to vote.

SHARES IN NOMINEE:  Direct your nominee company to appoint you as a proxy to attend and vote at the meeting

YOU ARE NOT GOING TO THE MEETING

SHARES IN CDP   :   You may appoint a proxy to attend and vote by filling up his/her name.   Alternatively, you may also direct the Chairman of the Meeting to vote on your behalf by only filling up your shareholdings and your vote.  Under the column NAME, write “CHAIRMAN OF THE MEETING”.  Mail back the proxy form to the registrar, Boardroom Corporate & Advisory Services Pte Ltd

SHARES IN CPF/SRS/NOMINEE:  Direct your agent bank/nominee company to vote on your behalf.

[Boon]

Sabana Manager has warned unitholders not to vote them out.  Summarize them into 10 points.  We reply.

1.   Their fees are no higher than the rest.
But their performance is the worst in the last 3 years.

2.   The strategic review committee is currently undertaking a strategic review
This committee is headed by the same people who watched the Manager lost $215m in the last three years without making a sound. Do not expect too much from them.

3.   The unitholders who requisitioned the meeting have no replacement manager.
If an internal manager cannot be found, E-Shang Redwood is a ready manager

4.   The unitholders who requisitioned the meeting have no strategy to improve the performance.
The present Manager lost $215m in the last three years, the threshold to improve on their performance is very low.

5.    Its poor performance was not its fault.  
They blame it on market conditions, expiry of master lease, JTC, etc.  If you stand too close, they may blame you too.

6.     Lenders will recall loans.
The average leverage ratio is less than 42%.  The collateralized properties do not belong to the Manager.  On 9 Mar 17, OCBC upgraded the sukuks in a credit update.

7.     Lenders will not lend.
They will lend.

8.     Sponsor will not support.
This is a positive for unitholders.

9.     Internalised Manager is not good.
Ask why unitholders of Croesus Retail Trust is willing to pay $50m to internalize if the internalized manager model is inferior.

10.    Winding up will cause big losses.
The Manager is using scare tactics to warn of big losses in the event of a winding up.  Do not forget this is the same Manager who bought three properties at prices way above the market rate while prophesying a doomsday scenario.

Today, we learned that the CEO may have sold their 45% stake in the Manager to Vibrant Group, the Sponsor.  This effectively makes whatever he said in the EGM circular insincere and bordering on being nonsensical.

3.   The unitholders who requisitioned the meeting have no replacement manager.
If an internal manager cannot be found, E-Shang Redwood is a ready manager
 
Transitional arrangement during the period between the removal of a REIT manager and the appointment of the new REIT manager: 


Even if there is a ready manager to replace the existing Manager immediately, I don’t think the outgoing manager would be removed immediately.

There ought to be an overlapping period during which the incoming and outgoing managers must work together to achieve smooth transition and handover.

If there is no ready replacement manager available to take over immediately, as a MAS licensed professional RM, would it be unreasonable to expect the outgoing manager to act professionally and to act in the best interests of the unit holders at all times, by voluntarily offering to “stay on even if voted out” until a new Manager is appointed and the handover has been completed?

Disappointedly, that didn't happen................

In any event, if for whatever reasons, there is no manager under the trust, the trustee is under duty to oversee the REIT, IMO.

Just expressing a view.......................
_________________________________________________________________________________________________________

[ACTIVIST SPEAKS]

I went thru' the entire trust deed and I believe there is no guidance on this transition period. Other sections that specify there must always be a Manager and the Manager cannot leave without the Trustee's approval seem to suggest the scenario you put forward i.e. If there is no ready replacement manager available, the incumbent Manager is expected to stay on till a new Manager is appointed.

It is disappointing that the present Manager keeps pointing out that we have no replacement Manager when it is quite obvious as minority unitholders, we do not have the capability nor is it feasible for us appoint one at this juncture. In any case, I believe most unitholders are aware of the situation. It will be a sad day if they are not voted out on 28 Apr 17.

[TTTI]

I went thru' the entire trust deed and I believe there is no guidance on this transition period.  Other sections that specify there must always be a Manager and the Manager cannot leave without the Trustee's approval seem to suggest the scenario you put forward i.e.  If there is no ready replacement manager available, the incumbent Manager is expected to stay on till a new Manager is appointed.

It is disappointing that the present Manager keeps pointing out that we have no replacement Manager when it is quite obvious as minority unitholders, we do not have the capability nor is it feasible for us appoint one at this juncture.  In any case, I believe most unitholders are aware of the situation.  It will be a sad day if they are not voted out on 28 Apr 17.

Don't mean to be a wet blanket here...
But Vibrant has been increasing its stake, as you prob already know.

How do you think that affects your chances of succeeding?
E Shang's stake is comparatively puny.

[ACTIVIST SPEAKS]

Vibrant is actually negotiating to increase their stake in the Manager (which they already control 51%). Effectively, it makes no difference to their present interest of 12.18% in Sabana REIT even if Vibrant increases its stake in the Manager to 100%. As far as Sabana REIT is concerned, Vibrant has not disclosed any increase in their stake.

ESR and Tong JinQuan are still keeping their game plan to themselves. Collectively, they have 11.18%. It will be strange if both of them are in alliance with Vibrant or the Manager as Tong was cutting his loss at 0.34 by not picking up the rights under the current structure. ESR only came in after we mooted the idea of removing the Manager.

However, we know under the current dynamics, anything is possible. Regardless of the outcome, I strongly believe we will end up in a better position than what it is now. It is a pity that the authorities chose not to take any action against the Manager and its directors for what they did.

[ACTIVIST SPEAKS]

If we cannot remove this manager who is not taking good care of our investment, it is natural that we take back our money. The alternative is letting them continue to manage in the same fashion that lost $215m in the last three years. More importantly, this Manager is still practicing the same recently by buying overpriced properties in exchange for inflated rent arrangements that caused this $215m loss. It is not wise to let them continue managing our money              

The resolutions were carefully crafted to give unitholders a choice in resolution 2 to decide whether you prefer to internalise or to look for another external manager after we voted out the present one. If the external model is indeed  chosen, every single REIT Manager in Singapore will want to manage this 1 billion dollar REIT. No need to doubt this because it is purely commerical

[ACTIVIST SPEAKS]

" Just because our approach didn' t work in the past, doesn' t mean it cannot work in the future" ....... Sabana Manager (yes!!! they actually said it yesterday)

" Insanity is doing the same thing over and over again, but expecting different results" ...... Albert Einstein


SIAS DIALOGUE SESSION

1. In Mr Steven Lim' s presentation, he twice reminded the audience that he did not say that the bank would not renew the loan nor would the bank foreclose the loans. He did not know. But he did talk a lot on things he admittedly said he did not know.

2. He had made reference to the proforma financial effects of proposed internalisation. Using their figures, income available for 2016 is $3.35m more under internalization than the current external model. For some strange reason, Mr Steven Lim, a Chartered Accountant and Ex Managing Partner of Arthur Anderson, said he was not sure whether this proposed internalization would bring any immediate benefits.


3. He had repeatedly used " uncertainty" as a consequential peril if the Manager is removed. This Manager lost $215m in the last 3 years. If the Manager continues to do what they did, the only certainty is this Sabana REIT will be bankrupt in the next 8 years.

4. He threatened that the strategic review would terminate if the Manager is removed. Everybody in the Singapore REIT industry knows the best possible outcome of this strategic review is to terminate the service of this incompetent Manager.

5. Where the hell was the CEO and why was his name withdrawn at the last minute???

6. Does SIAS understand the meaning of a Dialogue Session?

[YMPL]

The Edge's report on the meeting.

Sabana REIT explains why resolutions not in best interests of unitholders at dialogue session
http://www.theedgemarkets.com.sg/sabana-...ue-session

[specuvestor]

The Edge's report on the meeting.

Sabana REIT explains why resolutions not in best interests of unitholders at dialogue session
http://www.theedgemarkets.com.sg/sabana-...ue-session

SINGAPORE (April 22): The manager of Sabana REIT is recommending unitholders vote against the resolutions tabled for voting in the EGM on April 28.

“Having reviewed the resolutions carefully, the board and manager are of the view that they are not in the best interests of unitholders,” said Sabana REIT Management (SREIM) in its presentation in Friday's dialogue session organised with the Securities Investors Association (Singapore).

Isn't this "board" the board of the manager? I don't understand what is the value of the vested party's say in this? When there is IPT the vested party abstains

Where is the trustee in this? I think something wrong with this process

[TTTI]

" Just because our approach didn' t work in the past, doesn' t mean it cannot work in the future" ....... Sabana Manager (yes!!! they actually said it yesterday)

" Insanity is doing the same thing over and over again, but expecting different results" ...... Albert Einstein


SIAS DIALOGUE SESSION

1. In Mr Steven Lim' s presentation, he twice reminded the audience that he did not say that the bank would not renew the loan nor would the bank foreclose the loans. He did not know. But he did talk a lot on things he admittedly said he did not know.

2. He had made reference to the proforma financial effects of proposed internalisation. Using their figures, income available for 2016 is $3.35m more under internalization than the current external model. For some strange reason, Mr Steven Lim, a Chartered Accountant and Ex Managing Partner of Arthur Anderson, said he was not sure whether this proposed internalization would bring any immediate benefits.


3. He had repeatedly used " uncertainty" as a consequential peril if the Manager is removed. This Manager lost $215m in the last 3 years. If the Manager continues to do what they did, the only certainty is this Sabana REIT will be bankrupt in the next 8 years.

4. He threatened that the strategic review would terminate if the Manager is removed. Everybody in the Singapore REIT industry knows the best possible outcome of this strategic review is to terminate the service of this incompetent Manager.

5. Where the hell was the CEO and why was his name withdrawn at the last minute???

6. Does SIAS understand the meaning of a Dialogue Session?

3. No. Sabana REIT won't be bankrupt in 8 years.
Cos they'd just do more rights issue and dilute the hell out of you guys, and you guys would be forced to subscribe or face heavy dilution, and they can trumpet the amazing support, as seen from the over subscription.

OUCH.

Also, point 6. Come on, don't take it out on SIAS. They are just facilitators. I'd much prefer to have them around.

Good luck for the EGM.