| Latest Forum Topics / ESR-LOGOS REIT Last:0.265 -- |
 Post Reply
|
|
CIT rejects MI REIT's recapitalisation plan
|
||||||||||||
|
katak88
Senior |
23-Nov-2009 08:48
|
|||||||||||
|
x 0
x 0 Alert Admin |
Transparency questions
MI-Reit managers make statements about rival CIT 05:55 AM Nov 23, 2009
SINGAPORE - Over the weekend, the tension amid the ongoing corporate tussle between two real estate investment trusts was raised a notch higher. This came when the managers of MacarthurCook Industrial Reit (MI-Reit) made statements questioning the transparency of its rival, Cambridge Industrial Trust (CIT). On top of formally asking CIT to disclose details as to why it is opposing MI Reit's proposed recapitalisation plans, MI Reit has also raised the possibility that there could have already been instances of conflicts of interests. Both sides are in a tussle to win the votes of other unitholders of MI-Reit, who will be voting at an extraordinary general meeting (EGM) today as to whether or not to accept the proposed rights issue and share placement. CIT - which holds a near 10-per-cent stake in MI-Reit - last Friday said it continues to oppose the proposed recapitalisation plans, which it described earlier as being massively value-destructive. "If (the manager of CIT) is still maintaining its earlier recommendation to MI-Reit's unitholders as to how they should vote, we believe that our unitholders deserve to be treated fairly and that the board of CITM must explain in detail and clearly the justifications for its recommendation to them," said MI-Reit's chief executive Nick McGrath, in a statement to the Singapore Exchange last Saturday evening. Mr McGrath added that CIT should provide details - like a quantitative analysis - supporting the latter's recommendation to other MI-Reit unitholders by 2pm yesterday, which was 24 hours ahead of the EGM today. Was there conflict of interest? Meanwhile, in a separate statement issued yesterday, MI-Reit also sought clarifications from two non-executive directors of CIT, who are also directors of an entity belonging to National Australia Bank. The bank is a senior debt-refinancier to both MI-Reit and CIT, as well as an adviser and underwriter to MI-Reit's ongoing recapitalisation exercise. MI-Reit has asked Mr Ian Smith and Mr John Wood, the two non-executive directors of CIT, to confirm that they did not use their position as directors in the bank's division to obtain information about MI-Reit. CIT and both non-executive directors have not issued any response as at press time yesterday. Earlier last week, CIT said that it would oppose the proposed recapitalisation plan and had tried to gain control of MI-Reit's management and assets. But the Monetary Authority of Singapore said last Friday it disapproved CIT's bid to be a manager for both Reits, due to potential conflicts of interest. MI-Reit is in urgent need of funds: It has to refinance $226 million in loans, which would mature by next month, and pay for a property in the International Business Park and four other industrial assets in Singapore. It is at risk of liquidation if its unitholders fail to support its proposed recapitalisation plan, said MI-Reit early last week. Sias head disappointed by lack of transparency
05:55 AM Nov 23, 2009
SINGAPORE - The head of a corporate governance advocacy group here said that he was disappointed with the lack of transparency by Cambridge Industrial Trust (CIT) amid the week-long war of words it had with MacarthurCook Industrial Reit (MI-Reit). Securities Investors Association of Singapore (Sias) chief executive officer David Gerald told MediaCorp: "In terms of disclosure, CIT has not been very transparent. The latest development from this episode seemed to suggest there has not been total transparency in their disclosure and this is a corporate governance issue." One issue that irked Mr Gerald is the misleading statements that CIT issued regarding its claims that it is in the process of finalising refinancing arrangements. This was disclosed amid CIT's bid to gain control of MI Reit's management and assets early last week. But last Friday, CIT's manager clarified that it does not have any financing arrangements in place yet for MI-Reit and discussions on alternative options are "only preliminary and exploratory in nature". The final position taken by the manager of CIT is contrary to the impressions it has created in the marketplace earlier, said Mr Gerald. "CIT must consider the interest of shareholders and vote to save MI-Reit. To vote against wouldn't be in the interest of the shareholders. "I am disappointed with the current revelations by CIT, which seems to suggest that the interested parties have been fed with unreliable information," said Mr Gerald. "Whether or not there has been a breach of current regulations, this is for the authorities to consider. I'm sure the authorities will be looking into this episode very carefully." URL http://www.todayonline.com/Business/EDC091123-0000083/Sias-head-disappointed-by-lack-of-transparency
MI-REIT's Manager conveys the following message to the Board of CITM
21-Nov-2009 20:47:49
MI-REIT announcement 221109
22-Nov-2009 17:51:05
|
|||||||||||
| Useful To Me Not Useful To Me | ||||||||||||
|
soloman
Master |
22-Nov-2009 11:22
|
|||||||||||
|
x 0
x 0 Alert Admin |
SORRY - I DON;T HAVE MUCH FAITH IN CIT THE WAY IT HANDLE ALL THE ISSUES NEITHER DO I HAVE MUCH FAITH IN MI-REIT - THEY HAVE LOTS OF TIME TO RESOLVE THIS DON'T OWN ANY SHARES IN EITHER OF THEM AND DON;T INTEND TO DO SO EITHER- -- AFTER THIS FIGHT BETWEEN THEM THAT'S WHY NEXT YEAR AGM IS GOOD FOR REIT INVESTORS TO QUERY THEM HARD |
|||||||||||
| Useful To Me Not Useful To Me | ||||||||||||
|
|
||||||||||||
|
katak88
Senior |
20-Nov-2009 21:25
|
|||||||||||
|
x 0
x 0 Alert Admin |
Business Times - 20 Nov 2009 MAS says CITM cannot be appointed as MI-REIT's manager By ANGELA TAN Cambridge Industrial Trust Management Limited (CITM), as manager of Cambridge Industrial Trust (CIT), said on Friday the Monetary Authority of Singapore (MAS) will not approve CITM being appointed as the manager of MI-REIT. CITM said this is due to potential conflicts arising from the competing interests of unitholders in CIT and MI-REIT. CITM added that the only proposals being considered now are contingent upon CITM being appointed the manager of MI-REIT. It is continuing explore options that do not involve its being appointed as manager of MI-REIT, and further announcement will be made as and when appropriate. The company still intends to vote against the resolutions to be considered at the extraordinary general meeting of MI-REIT unitholders on 23 November 2009. CITM launched a push to gain control of MI-REIT's management, having bought a key 9.8 per cent stake in the trust earlier this month. |
|||||||||||
| Useful To Me Not Useful To Me | ||||||||||||
|
katak88
Senior |
19-Nov-2009 22:14
|
|||||||||||
|
x 0
x 0 Alert Admin |
Business Times - 19 Nov 2009 MI-Reit manager hits out at rival CIT's proposal Subordinated loan likely more pricey than MI-Reit's cost of equity By CHEW XIANG THE battle for control of MacArthurCook Industrial Reit (MI-Reit) continued yesterday with MI-Reit's manager Nicholas McGrath slamming a rival proposal from Cambridge Industrial Trust (CIT) as 'entirely ingenuous'. MI-Reit is asking unitholders to approve next Monday a $430 million rescue package involving a share placement to 'cornerstone' investors, a rights issue, and $215 million in new loans. The troubled Reit needs the money to refinance $226 million in loans and meet a $90 million obligation to buy the 1A International Business Park (IBP) property, both by the end of the year. But CIT, which bought a 9.76 per cent stake in MI-Reit after the announcement of the rescue package and is angling to take over management of MI-Reit, said the recapitalisation exercise destroyed value for unitholders as the discount to net asset value was too steep. Non-sponsor existing unitholders post-transaction would be left with just 40 per cent of total holdings, CIT said, from over 70 per cent at present. It is instead proposing itself as manager of MI-Reit and has pledged an 'initiative to take advantage of an enlarged pool of assets to benefit all investors', Chris Calvert, chief executive officer of its manager, said on Tuesday. He said MI-Reit investors would benefit from access to a subordinated loan facility which CIT holds, and which it could use to fully pay off its $90 million obligation to buy the IBP property. But in an interview yesterday with BT, Mr McGrath said a subordinated loan would likely be more expensive than MI-Reit's cost of equity and much higher than the 350 to 450 basis points over Sibor that it will pay for its negotiated term loan. Mr McGrath added that MI-Reit's aggregate leverage would increase, while CIT, with just $13 million in cash, has little debt overhead to increase its own gearing. 'Any which way you put it, they will need to do capital raising and so far they've said nothing about that,' he said. He admitted that an orderly sale of MI-Reit's assets - which has been suggested in some quarters, as its units are trading far below net asset value - might realise close to market value, or about 90 cents per unit. 'But I'm entirely uncomfortable with losing control of the process,' Mr McGrath said, adding that if creditors force a quick firesale, investors might be left with nothing. The steep discounts were necessary because the Reit had to urgently raise a minimum of $125 million - twice its market capitalisation in June - to rebalance its capital structure so that it could take on new loans, Mr McGrath said. In a report released on Tuesday, Phillip Securities analyst Lee Kok Joo said that whatever the outcome of the extraordinary general meeting on Monday, 'the risk is more on the part of CIT unitholders rather than MI-Reit unitholders' but said the proposal opens up the possibility that MI-Reit unitholders' stakes would not be heavily diluted. According to its calculations, MI-Reit offers a potential FY2011 distribution per unit (DPU) of 1.89 cents, which translates into a dividend yield of 11 per cent based on the rights price of 15.9 cents, if the proposed transactions go through. 'For investors who are not keen, we maintain our 'sell' recommendation,' Phillips said. Business Times - 18 Nov 2009 Rivals in MI-Reit tussle turn to newspaper ads Both set out their respective positions ahead of Monday's EGM By CHEW XIANG THE managers of MacArthurCook Industrial Reit (MI-Reit) and Cambridge Industrial Trust (CIT) - its single largest shareholder - have taken a very public battle for control of MI-Reit to the newspapers. Yesterday, both spent thousands of dollars to take out full page advertisements setting out their respective positions ahead of an extraordinary general meeting next Monday. MI-Reit is seeking unitholder approval for a $217 million share placement and rights issue package, which it says is critical if the Reit is to survive into the new year. It has to refinance $226 million in loans and meet a $90 million obligation to buy the 1A International Business Park property, both by the end of the year. CIT - led by Chris Calvert, the former CEO of MI-Reit's manager - is arguing that the share placement destroys value for present unitholders. MI-Reit is seeking to issue some 83 per cent of units outstanding at a 'massively dilutive' 70 per cent discount to net asset value, Mr Calvert said. He is urging other unitholders to reject the recapitalisation plan and to support a motion, to install CIT as manager of MI-Reit at another meeting of unitholders to be convened in due course. That that would give MI-Reit access to a CIT subordinated loan facility, which could pay in full its $90 million obligation to purchase the building at IBP, Mr Calvert said yesterday in a statement to unitholders. He added that CIT expects to be able to refinance MI-Reit's loans maturing at the end of the year with takeout debt financing 'on substantially equivalent terms'. The loans would be secured against more than $500 million of unencumbered assets. 'Through managing both CIT and MI-Reit, (we expect) to generate economies of scale associated with an enlarged asset pool. This will result in achieving cost savings for both unitholders in a number of areas, including property management costs, valuation fees and others derived from having increased purchasing power,' Mr Calvert said. He added that there was no intention to merge the two Reits and that it was also not seeking to liquidate MI-Reit's assets. MI-Reit hit back yesterday with a point-by-point rebuttal of a CIT statement issued on Monday setting out CIT's opposition to MI-Reit's financing plan. Nicholas McGrath, CEO of MI-Reit's manager, said unitholders 'should not allow themselves to be distracted by such analyses that are inaccurate, incomplete and misleading'. 'It also does not discuss the key benefits of the transactions,' Mr McGrath said, which was removal of financing risk, reduction of total leverage and an enhanced portfolio and tenant base. He added that it was wrong to say $2.1 million was payable in underwriting fees to Standard Chartered, pointing that commissions were shared among all bookrunners, and also rebutted a claim by CIT that a fee-payment arrangement was 'double dipping'. Yesterday, George Wang of AIMS Financial Group - the present sponsor of MI-Reit and which along with AMP Capital Holdings and 'cornerstone' investors will participate in the controversial placement - raised his deemed stake to 9.96 per cent or 26.54 million shares through the further purchase of 3.5 million units at 40.2 cents apiece. CIT, with 26 million units, has a 9.768 per cent stake. |
|||||||||||
| Useful To Me Not Useful To Me | ||||||||||||
|
katak88
Senior |
17-Nov-2009 21:17
|
|||||||||||
|
x 0
x 0 Alert Admin |
Business Times - 17 Nov 2009
CITM says objective not to wind up MI Reit or merge with AIMS By ANGELA TAN SINGAPORE - As the battle to convince unitholders not to approve proposed plans to recapitalise MacArthurCook Industrial Reit (MI Reit), Cambridge Industrial Trust Management Limited (CITM) said it is not its intention to wind up the former. CITM, which holds 10 per cent of MI Reit, also confirms that it has no current intention of seeking any merger arrangements with the AIMS Financial Group. 'CITM's objective is not to wind up MI-REIT. Rather, it is to achieve a better outcome for MI REIT unitholders than that offered under AIMS recapitalisation proposal,' Chris Calvert, CEO of CITM said on behalf of Cambridge Industrial Trust (CIT). He said CITM referred to the possibility of winding up MI-REIT merely to highlight that MI-REIT unitholders would be better off if that occurred rather than to support AIMS recapitalisation proposal. CITM notes that, under its current rationalisation of certain non-core CIT properties, it has been able to achieve asset realisations consistent with or above respective current book value. CITM has stated that, if it becomes the manager of both CIT and MI-REIT, it intends to implement an initiative to take advantage of an enlarged pool of assets to benefit all investors - that is, the investors in both CIT and MI-REIT. Earlier, MI Reit announced a series of fundraising measures that will allow it to repay a portion of its borrowings that expire in December and at the same time buy five new properties. The combined measures, which include a rights issue, the introduction of a new strategic investor and the sale of new shares to eight cornerstone investors, will bring in $217.1 million (US$156.8 million) in fresh funds. The proposed exercise will see MI-Reit issuing new units to AMP Capital Holdings and other 'cornerstone' investors, followed by the rights issue. But CIT said the exercise will hurt existing unitholders because it is priced at a steep discount to MI-Reit's net asset value. Business Times - 17 Nov 2009 Bid launched to oust manager of MI-Reit Cambridge Industrial Trust against plan to recapitalise; offers itself as replacement By CHEW XIANG A FIGHT for control of MacArthurCook Industrial Reit (MI-Reit) has broken out after Cambridge Industrial Trust, a 9.76 per cent unitholder, yesterday said it opposes a recapitalisation exercise and is calling a meeting to oust MI-Reit's present manager and install itself instead. Chris Calvert, chief executive officer of CIT's manager, said the exercise - to be voted on next Monday - was 'unfair and value destructive' because it was pegged at a 70 per cent discount to net asset value. MI-Reit has to re-finance $226 million in loans and meet a $90 million obligation to buy the 1A International Business Park property, both by the end of the year, after a number of extensions of deadline. It appeared to have found a solution earlier this month when it announced a plan to place out some 221 million units - 83 per cent of existing units outstanding - to AMP Capital Holdings, present sponsor AIMS Financial Group and other 'cornerstone' investors, at 28 cents a unit. AMP and AIMS would be co-sponsors of the Reit, which following the transaction would then undertake a fully-underwritten two- for-one rights issue. The placement and rights issue would raise gross proceeds of $217 million and the manager has also arranged for another $215 million in loans. Mr Calvert, who was formerly CEO of MI-Reit's manager, said the whole deal 'in our view is massively value destructive.' The placement price of 28 cents a unit was 70 per cent discounted to the Reit's net asset value of 94 cents a unit, and 32 per cent to its volume weighted average price before the announcement of 41.2 cents. But the steep discounts were necessary to secure the investors' backing, said Nicholas McGrath, CEO of MI-Reit's manager. 'There is a certain risk that (creditor) banks will force the Reit into liquidation,' so that its assets will attract only firesale prices. 'It is my judgement that if investors vote these proposals down they will lose all their money,' he said. 'It is a very stark choice.' He added that the $90 million purchase - now valued at just over $70 million - had been arranged by Mr Calvert during his tenure and was weighing the Reit down. 'The monkey on the back of MI-Reit is we have a $90 million obligation which no bank will touch,' he said. CIT said it had a 'value-accretive' solution and yesterday issued statements urging other unitholders to block the deal and to support a meeting it is calling to install itself as MI-Reit's manager. As manager of both CIT and MI-Reit, it would then 'implement an initiative to take advantage of an enlarged pool of assets to benefit all investors,' it said. Mr Calvert said one of the options was a merger between CIT and MI-Reit. Discussions were held early this month, pricing MI-Reit at around 1.1 CIT units or about 48 cents at closing price last Friday. 'Consolidation is one of the options,' Mr Calvert said. The alternative was to liquidate the assets and return cash to unitholders, and he said he was confident of getting a reasonable discount on net asset value. But Mr McGrath said CIT was 'opportunistic' and 'disingenuous' as it had picked up its close to 10 per cent stake only after the announcement of the recapitalisation exercise. 'There is no offer from them, there is no plan, no funding,' he said. Mr Calvert said CIT would be able to secure financing, although he did not provide details. The present plan also gives millions of dollars in fees and discounts to the parties involved - Standard Chartered Group for placement and underwriting fees, plus management fees and cost recoveries for AIMS, he said. 'It is unitholders who are losing out,' he said. Other opponents to the deal are also rallying. Mohamed Salleh of Second Chance Properties, who said he owns 5 million units personally, said he could not understand how the favoured investors got such a good deal. 'It's totally unfair. Why can't they offer it to all unitholders? If they price (a rights issue) so low I myself will apply for more units, there is no need to get it underwritten.' Another unitholder, Ang Kong Meng, yesterday circulated a letter to unitholders, calling the proposed transactions 'most unfair, unethical and oppressive to all existing unitholders'. The directors 'have over emphasised the going concern problem of MI-Reit' to induce unitholders to support them, he said. MI-Reit yesterday closed at 40.5 cents, up five cents, or 14 per cent, on volume of 23 million units. George Wang, who heads AIMS, said he was responsible for 'about half' the trades buying up units to bolster his and MI-Reit's position ahead of the meeting on Monday. |
|||||||||||
| Useful To Me Not Useful To Me | ||||||||||||
|
|
||||||||||||
|
katak88
Senior |
17-Nov-2009 13:06
|
|||||||||||
|
x 0
x 0 Alert Admin |
RESPONSE TO MI-REIT ANNOUNCEMENT OF 16 NOVEMBER 2009 CLARIFICATION OF CIT INITIATIVE 17-Nov-2009 12:45:52 http://info.sgx.com/webcorannc.nsf/AnnouncementToday/13D41592C204E675482576710016912C?opendocument Response to CIT's Analysis of MI-REIT's proposed transactions and request for EGM 17-Nov-2009 09:53:56 http://info.sgx.com/webcorannc.nsf/AnnouncementToday/ABA87B2908F66DC648257671000A6CD6?opendocument Media Release: Cambridge Industrial Trust to vote against AIMS recapitalisation proposal of MI-REIT 16-Nov-2009 07:18:59 http://info.sgx.com/webcorannc.nsf/AnnouncementLast3MonthsByCompanyNameAndCategory/FBFADCD0EFA3EC9E4825766F00520F83?opendocument Advice to MI-REIT Unitholders regarding AIMS recapitalisation 16-Nov-2009 07:17:36 http://info.sgx.com/webcorannc.nsf/AnnouncementLast3MonthsByCompanyNameAndCategory/B0AF92A8592B3CFE4825766F0051E142?opendocument |
|||||||||||
| Useful To Me Not Useful To Me | ||||||||||||
|
katak88
Senior |
17-Nov-2009 12:56
|
|||||||||||
|
x 0
x 0 Alert Admin |
|
|||||||||||
| Useful To Me Not Useful To Me | ||||||||||||