THE internalisation committee and incoming directors of Sabana Industrial Real Estate Investment Trust (Sabana Reit) said on Monday (Feb 3) that they intend to vote against all the resolutions in the extraordinary general meeting (EGM) requisitioned on Jan 17.
They also urged unitholders to vote against the requisitioned resolutions, which include a proposal for the trustee, HSBC Institutional Trust Services (Singapore), and the Reit’s manager to undertake a price discovery process, with a view of achieving “a potential sale of all or the majority” of the Reit’s assets.
In the Monday statement, the internalisation committee and directors-elect said Sabana Reit already engages “reputable and independent valuers” annually to undertake a fully independent valuation of its property portfolio, with the most recent one done on Dec 31, 2024, by Jones Lang LaSalle Property Consultants and CBRE.
“To requisition an EGM to do the same valuation again less than one month later is a complete waste of unitholders’ money, if we assume the (requisitioning unitholders) agree that any potential sale should be done at net asset value or above,” said the statement.
The statement added that once the new internal manager takes over from the current manager of Sabana Reit, the committee and directors plan to consider several strategic options to “maximise the value for Sabana unitholders, including the sale of the entire portfolio”.
“However, it is essential that any future price discovery process be conducted rigorously, and independently, with the sole objective of achieving the highest possible value for Sabana unitholders,” the statement said.
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The requisition notice came from unitholders owning over 10 per cent of the trust, including its independent non-executive director, Chan Wai Keong, also known as Charlie Chan.
The requisitioning unitholders had called for the EGM as they believe “significant costs” have been and continue to be incurred by the Reit in relation to the internalisation process.
Urged to withdraw resolutions
The statement from the committee and directors-elect highlighted that the current external manager of Sabana Reit previously recommended a “value-destructive proposal” through a merger with another Reit, which would have resulted in “a significant loss of value”.
“The internalisation committee and the directors-elect view this past recommendation as an indication that only the new board-elect should be entrusted with a process as critical as a price discovery or a potential sale in the future,” said the statement.
The committee and the directors elect also believe it is inappropriate to entrust this process to the external manager, given the “overwhelming vote by unitholders in favour of internalisation”.
As the committee and directors-elect intend to consider all options to unlock value for Sabana Reit’s unitholders, they urged the requisitioning unitholders to withdraw their resolutions.
The statement also cautioned requisitioning unitholders to consider whether they have the votes to pass the resolutions, since “almost all” key independent unitholders who previously supported the internalisation and spoke to the committee and directors-elect have indicated they intend to vote against the requisitioned resolutions.
“As such, the internalisation committee and directors-elect strongly urge the requisitioning unitholders to carefully consider if (they have) sufficient support from Sabana unitholders to pass the resolutions,” the statement said.
“If the (requisitioning unitholders) do not have sufficient votes to pass the resolutions, the EGM will potentially be a complete waste of unitholders’ money. The failure to pass the resolutions will also be in complete contradiction to (their) claim of trying to reduce costs for Sabana unitholders,” it added.
Units of Sabana Reit ended 1.4 per cent or S$0.005 higher at S$0.36 on Tuesday.
