EC World Reit

[cyclone]

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EC World REIT is a Singapore REIT established with the investment strategy of principally investing, directly or indirectly, in a diversified portfolio of income-producing real estate which is used primarily for e-commerce, supplychain management and logistics purposes, as well as real estate-related assets, with an initial geographical focus on the People’s Republic of China.

The IPO Portfolio comprises six properties located in Hangzhou, the PRC : 
1. Chongxian Port Investment, 
2. Chongxian Port Logistics, 
3. Fu Zhuo Industrial, 
4. Stage 1 Properties of Bei Gang Logistics, 
5. Fu Heng Warehouse, 
6. Hengde Logistics.

Highlights :
* 777,512,000 units are expected to be granted listing and quotation in the Official List of SGX-ST on 28 July 2016.
* Trading in the units will commence at 2.00 p.m., Thursday, 28 July 2016.
* An offering of 7,500,000 units to the public in Singapore.
* An international placement of 180,625,600 units.
* The offering price of $$0.81 per unit.

[money]

High chance price will drop, singaporeans are so scared of china stocks ever since the 2008/9 crisis. It seems to me that many are just listing here to collect easy money

[Reyes]

open at $0.81 ..

[noobinvestors]

Our humble opinion is that the risk of potential inflated valuation and rental is very high. Please refer to link below.

https://writingofinvestingnoob.com/2018/...orld-reit/

[weijian]

The REIT manager is supposed to be working closely with the Sponsor. With this notice coming out, just a few days after it stated to SGX that it had no material risk, and then a few days before it has to pay some interest....this doesn't look good. It looks dejavu to another Trust (name with a bird in it) that had similar "sponsor relationship issues"?

UPDATE IN RELATION TO THE RENT RECEIVABLES AND FINANCING OBLIGATIONS OF THE ECW GROUP

The Sponsor Group typically maintains ageing between two to three months as their practice is to make rental payment quarterly in arrears. This practice is common for commercial, industrial and warehousing leases in the PRC4. The Manager has been in regular dialogue with the Sponsor Group to remind the related party lessees (including Master Lessees) of their payment obligations under the existing lease agreements, in the Manager’s efforts to ensure prompt and timely rent payments. Despite the Manager’s efforts, there has been no repayment plan provided by the Sponsor Group to date. As the ageing of some of the Outstanding Rent Receivables has exceeded three months and there has been no repayment plan provided by the Sponsor Group, the Manager has assessed that there is a high risk of non-collection of the Outstanding Rent Receivables.

In view of the foregoing, there is a high risk that the ECW Group would not be able to fully repay the offshore interest expenses due on 31 August 2023 (Thursday) pursuant to its existing offshore facilities (“Offshore Facilities”), and would need to request the facility agent under the Offshore Facilities to release part of the offshore interest reserve maintained by the ECW Group pursuant to the Offshore Facilities (the “Offshore Interest Reserve”) in order to fully repay the offshore interest expenses. Pursuant to the terms of the Offshore Facilities, the interest reserve must be topped up by the ECW Group within five business days of such release, which the Manager expects will be challenging for the ECW Group given its financial position unless the Sponsor Group manages to pay a sufficient amount of the rent receivables within five business days from the release of part of the Offshore Interest Reserve. The breach of this requirement would result in an event of default pursuant to the Offshore Facilities and also triggers a cross-default under the existing onshore facilities of the ECW Group (“Onshore Facilities”, and together with the Offshore Facilities, the “Facilities”).

https://ecwreit.listedcompany.com/newsro...VDAJ.1.pdf

[CY09]

Besides the 5% appreciation of SGD vs RMB, EC REIT has reported a decline of 43% for its china assets based solely on RMB. This means purely based on the property price, the decline in logistics assets is staggering. A problem is that its logisitcs tenants are overdue on their rentals, this partly highlights why valuation plummetted. Nevertheless, it is frightening how much China property values have fallen. HK has seen about the same magnitude.

Much focus has been how weak US commercial real estate is, but it seems China is in a worse situation as many would know.

EC world REIT's leverage is now above 50%, with its debt maturing in a year's time, and ICR being only 2.11%; it is likely a cash call have to be made by EC REIT. Selling the china assets now would be value accertive but I doubt EC world REIT would have the political ability to mass dump properties when the state of China is in a bad shape

https://links.sgx.com/FileOpen/ECW_4Q23_...eID=790036