THE trustee-manager of Dasin Retail Trust has received a letter of demand dated Mar 4 regarding S$99,139.13 in alleged fees due and owed to Sun Shu, a former independent non-executive director.

 

The trustee-manager, Dasin Retail Trust Management (DRTM), said on Thursday (Mar 7) that the former director resigned on Aug 29, 2023, and is seeking his fees for the period from Aug 1, 2022, to Aug 29, 2023.

 

It is seeking legal advice over the letter.

 

The move comes weeks after Wang Qiu, DRTM&rsquo s former chief executive fired in February, filed a winding-up application against the trustee-manager.

 

Zhang Guiming, the nephew of Zhang Zhencheng, a non-executive director on the trust&rsquo s board, also filed a winding-up application against DRTM the week before Wang did.

 

The trustee-manager also received letters of demand for alleged outstanding sums owed in respect of monthly salary, payments made on behalf of the trustee-manager, and/or a loan extended to the trustee-manager.

 

The letters came from Zhang Guiming, Wang, chief financial officer Ng Mun Fai, former investment division general manager Lu Zhiqi, and executive secretary Liu Ting.

A FORMER employee of Sino-Ocean Group has been appointed as the acting chief executive officer of the trustee-manager of Dasin Retail Trust.

 

The appointment of 36-year-old Wang Peng was announced by the trustee-manager on Friday (Feb 23) night, a day after the appointment took effect.

 

This follows the Feb 17 announcement by the trustee-manager that it had given notice of termination to its then CEO, Wang Qiu.

 

In its Friday night filing, the Dasin Retail Trust Management (DRTM) said that its directors Cao Yong and Zhang Zhencheng (together with his alternate director Zhang Zhongming) disagreed with the other members of the board that Wang Peng should be appointed as acting CEO as they did not agree with the termination of Wang Qiu as CEO.

 

Wang Peng has held several posts at Sino-Ocean Group in the past decade. His most recent role, from March 2021 to June 2023, was director (investment centre) at Sino-Ocean Group Beijing Development Division.

 

According to information that DRTM provided in its regulatory filing, Wang Peng holds a master&rsquo s degree in construction management from Columbia University and a bachelor&rsquo s degree in civil engineering from Tsinghua University.

 

He will be responsible for the management and operations of DRTM and will work with the board to determine business strategies and ensure that such strategies are executed.

 

THE trustee-manager of Dasin Retail Trust has appointed a new chief investment officer (CIO) after firing the previous CIO who demanded alleged outstandings owed by the trustee-manager, based on its bourse filing on Tuesday (Feb 13).

 

It received letters of demand on Jan 24 from four individuals: its chief executive officer Wang Qiu, chief financial officer Ng Mun Fai, executive secretary Liu Ting, as well as former CIO Lu Zhiqi, for payments totalling S$783,376 in respect of monthly salaries, payments made on behalf, and/or a loan extended to it.

 

On Feb 3, Dasin Retail Trust&rsquo s board of directors said that it is &ldquo seeking legal advice&rdquo on the matter.

 

The board, as the trust&rsquo s trustee-manager, has subsequently on Feb 5 given notice of termination to Lu, before entering into an employment agreement with Chinese real estate veteran Wang Peng, who will be the new CIO from Feb 13.

 

Wang will be responsible for overseeing, leading and executing the investment and asset management functions, as well as the restructuring efforts of the trustee-manager, said the board.

 

The leadership movement came as the management received a requisition notice for an extraordinary general meeting (EGM) from a group of unitholders on Jan 19. The request to hold an EGM by unitholders entails the removal of the trust&rsquo s manager.

 

The unitholders also requested to internalise the trustee-manager function of Dasin Retail Trust and form a committee of the requisitioning shareholders claiming to own more than half the trust to identify and appoint a new board of directors.

 

Glory Class Ventures, as the other requestor for the EGM, sought to vote on three resolutions, including the removal of the current trustee-manager from Dasin Retail Trust. Glory Class Ventures holds about 11.8 per cent of the total voting rights of all the unitholders, according to its requisition notice dated Jan 22.

 

The trustee-manager said on Jan 26 that the EGM requisition notice was invalid, as the unitholders and Glory Class Ventures are not &ldquo unitholders&rdquo as defined under Section 54 of the Business Trusts Act 2004.

 

Dasin Retail Trust has reported a decline in the fair value of its investment properties. After obtaining independent valuations as at June 30, 2023, the trust&rsquo s properties are now valued at RMB9.09 billion, 4.6% lower than the RMB9.53 billion as at Dec 31, 2022.

 

In Singapore dollars (SGD), the trust&rsquo s portfolio fell by 8.27% h-o-h to $1.7 billion from $1.85 billion previously. The larger decline was attributable to the weaker RMB against the SGD.

 

The main reason for the decline is due to general weaker economic and market environment, lower passing rent, negative reversion in rental rate and lower occupancy rate, says the trust.

 

As at June 30, 2023, Dasin Retail Trust CEDU 0.00% &rsquo s occupancy rate fell to 84.5% from 91.5% previously as at Dec 31, 2022.

 

Due to the decrease in valuation and the weakening of the RMB against the SGD, United States dollar (USD) and Hong Kong dollar (HKD) in which the trust&rsquo s offshore loans are denominated, the trust has reported a breach of the gearing ratio, interest coverage ratio and loan to valuation ratio which it is obliged to maintain under its offshore facilities.

 

Dasin Retail Trust&rsquo s trustee-manager says it is seeking a waiver from the lenders of any breach of the financial covenants. It is also seeking approval from the lenders to reset the covenants as part of the discussions with the lenders to restructure and reschedule the group&rsquo s debt obligations.

 

Dasin Retail Trust has reported a decline in the fair value of its investment properties. After obtaining independent valuations as at June 30, 2023, the trust&rsquo s properties are now valued at RMB9.09 billion, 4.6% lower than the RMB9.53 billion as at Dec 31, 2022.

 

In Singapore dollars (SGD), the trust&rsquo s portfolio fell by 8.27% h-o-h to $1.7 billion from $1.85 billion previously. The larger decline was attributable to the weaker RMB against the SGD.

 

The main reason for the decline is due to general weaker economic and market environment, lower passing rent, negative reversion in rental rate and lower occupancy rate, says the trust.

 

As at June 30, 2023, Dasin Retail Trust CEDU 0.00% &rsquo s occupancy rate fell to 84.5% from 91.5% previously as at Dec 31, 2022.

 

Due to the decrease in valuation and the weakening of the RMB against the SGD, United States dollar (USD) and Hong Kong dollar (HKD) in which the trust&rsquo s offshore loans are denominated, the trust has reported a breach of the gearing ratio, interest coverage ratio and loan to valuation ratio which it is obliged to maintain under its offshore facilities.

 

Dasin Retail Trust&rsquo s trustee-manager says it is seeking a waiver from the lenders of any breach of the financial covenants. It is also seeking approval from the lenders to reset the covenants as part of the discussions with the lenders to restructure and reschedule the group&rsquo s debt obligations.

THE trustee-manager of Dasin Retail Trust : CEDU 0%said in a bourse filing on Friday (Feb 2) that it has received letters of demand from four individuals, for alleged outstandings owed in respect of monthly salary, payments made on the behalf of its trustee-manager, and/or a loan extended to its trustee-manager.

 

In the letters dated Jan 24, 2024, the trustee-manager was asked by its chief executive officer Wang Qiu chief financial officer Ng Mun Fai chief investment officer Lu Zhiqi, and executive secretary Liu Ting, for payments totalling S$783,376.

 

It also received a letter of demand, dated Jan 25, 2024, from Zhang Guiming, in relation to alleged outstandings of S$272,000 under two short-term advance agreements dated May 12, 2022 and Jan 18, 2023.

 

Zhang Guiming is the nephew of Zhang Zhencheng, a non-executive director on Dasin Retail Trust&rsquo s board.

 

Dasin Retail Trust Management said that it is &ldquo seeking legal advice&rdquo on the matter.

 

Its major shareholder has confirmed that it will continue to provide the trustee-manager with financial support under the shareholders&rsquo agreement dated Jul 23, 2021, the board understands. The major shareholder will also &ldquo assist the trustee-manager in properly resolving the relevant claims&rdquo .

 

The letters of demand come after Dasin Retail Trust received a requisition notice for an extraordinary general meeting from its unitholders, which it said was invalid.

THE manager of Dasin Retail Trust has received a requisition notice for an extraordinary general meeting (EGM) from unitholders owning over 10 per cent of the trust, it said on Wednesday (Jan 24).

 

In a bourse filing, the manager said it received an e-mail last Friday from law firm BTPLaw, which is acting for the group of unitholders, stating that a notice of the EGM had been published in The Business Times that day. The notice stated that the EGM is to be held on Feb 19.

 

Individuals that signed the notice included Tao Naiqun, Un Chong San, Michael Chui, Tan Eng Siong, Liu Shiyuan, Feng Guomin, Zhang Jieyan, Li Qunying, Li Zheng Ran, Li Jiaming and Feng Youzhen. The companies that signed the notice included Juniperus, Shining Scene Investments and Swift Chance International.

 

The law firm also requested that a register of unitholders be provided 48 hours before the EGM, for the purposes of verifying the unitholders.

 

Of the two resolutions proposed on the notice, one seeks to remove the manager of Dasin Retail Trust. The other seeks to internalise the trustee-manager function of Dasin Retail Trust and form a committee of the requisitioning shareholders claiming to own more than half the trust to identify and appoint a new board of directors.

 

Payment of fees and expenses related to the proposed internalisation, including those already paid by the requisitioning shareholders, was also included in the second resolution.

 

Dasin Retail Trust&rsquo s manager says that it is seeking legal advice over the requisition notice.

 

Separately, the manager also received a letter dated Jan 22 from Glory Class Ventures, requisitioning an EGM to vote on three resolutions: first, to remove the current manager from Dasin Retail Trust second, to internalise the manager function into Dasin Retail Trust, and third, to empower the internal manager to issue units.

 

The Glory Class requisition notice clarifies that the resolutions are not intended to be inter-conditional.

SINGAPORE - Dasin Retail Trust Management, the trustee-manager of Dasin Retail Trust, will hold extraordinary general meeting (EGM) by Jan 22 next year in relation to a requisition notice served by a group of 15 investors.

 

The requisition notice has to do with the investors&rsquo plan to replace the current trustee-manager with a newly incorporated internal one. The new entity will be wholly owned by all unitholders of Dasin Retail Trust.

 

On behalf of this group, unitholder Tao Naiqun had said in the letter issued in November that the minority investors were seeking to convene an EGM to approve the internalisation &ldquo as a matter of urgency&rdquo .

 

This was because the trustee-manager&rsquo s major shareholder, Sino-Ocean Capital, remains subject to a creditors&rsquo winding-up petition to be heard on Mar 27, 2024.

 

Notice of the EGM and details of the meeting will be sent to unitholders once the current trustee-manager has verified the unitholding of the requisitionists whose unitholdings are registered in the name of nominee companies.

 

ONE of Dasin Retail Trust&rsquo s lenders has expressed concern that the China property trust&rsquo s planned debt restructuring &ldquo may be further protracted&rdquo in the event that a proposed internalisation of its trustee-manager goes through.

 

In an update on Monday (Dec 4), trustee-manager Dasin Retail Trust Management (DRTM) reiterated that the Nov 23 requisition notice would be &ldquo considered in full&rdquo by its board after the unitholding of the requisitioners, and the validity of their requisition notice, have been verified and confirmed.

 

To recap, a group of 15 investors who claim to collectively hold over 10 per cent of the units in Dasin Retail Trust are seeking to replace the current external trustee-manager with a newly incorporated internal one.

 

DRTM announced its receipt of the requisition notice on Nov 25.

 

In its Dec 4 announcement, the trustee-manager also provided several updates regarding its ongoing debt restructuring efforts.

 

As one of the marketing agents appointed for properties owned by the trust, JLL said it was &ldquo liaising with a few potential investors&rdquo who expressed interest in the trust&rsquo s properties.

 

This comes after Dasin Retail Trust&rsquo s largest controlling unitholder Zhang Zhencheng agreed to provide pre-approval for the trust&rsquo s sale of retail malls at, or above, minimum selling prices.

 

Referring to an Oct 18 call that involved DRTM representatives, the trust&rsquo s lenders and its financial adviser FTI Consulting, the trustee-manager said it is &ldquo still in the process of considering certain requests&rdquo made by the lenders.

 

In addition, it received further input from &ldquo a certain onshore lender&rdquo on terms of the proposed restructuring, which the trustee-manager also said it is in the process of considering.

 

Other matters discussed during the Oct 18 call included the appointment of a monitoring accountant upon resigning of the restructuring term sheet.

 

DRTM said some of the lenders have conveyed their preference for FTI to take on this role, due to its &ldquo extensive involvement in the debt restructuring and familiarity with the affairs of the trust&rdquo .

 

A group of minority investors are seeking to take back control of the management of Dasin Retail Trust CEDU 0.00% (DRT) through the internalisation of DRT&rsquo s trustee-manager.

 

On Nov 23, 15 investors who claim to hold over 10% of the units in the trust are calling for an extraordinary general meeting (EGM) to do so. The investors have served a requisition notice to DRT&rsquo s board to demand that an EGM be convened to approve the internalisation.

 

Unlike Sabana Industrial REIT, the internalisation of DRT&rsquo s current trustee-manager may be an easier task than the Sabana internalisation. For one thing, the internalisation of a trustee-manager of a business trust has been done before in the case of Croesus Retail Trust. 

 

Secondly, it is easier to internalise a trustee-manager that has already been set up rather than apply for a capital market&rsquo s licence with the Monetary Authority of Singapore to set up a new trustee-manager. The only issue could be staffing. 

 

Thirdly, Sabana Industrial REIT&rsquo s internalisation requires a change of the trust deed which does now allow the REIT to hold a management company. Assuming that DRT&rsquo s business trust is set up in the same way as Croesus Retail Trust, the trust deed may allow for DRT to own the trustee-manager. 

 

The main challenge for the unitholders is the related party transactions where the anchor tenants in a couple of malls are related to the sponsor. 

 

Unitholders upset about value destruction 

 

&ldquo Investors believe that a trustee-manager which is controlled by DRT will be fully aligned with unitholders&rsquo interests,&rdquo reads the statement sent by a unitholder, one Tao Naiqun.

 

In the letter, the investors cited a list of concerns including the 39.9% y-o-y drop in DRT&rsquo s group valuation from $1.13 billion as at the end of FY2021 to $679 million as at the end of FY2022. Other concerns include the lack of progress on the refinancing front with notices from Bank of China Singapore Branch, Bank of China Limited Zhongshan Branch and Malayan Bank Berhad Singapore Branch calling defaults under syndicated facilities.

 

The minority investors are also &ldquo disturbed&rdquo by the announcements about the situation from the manager&rsquo s board, including the resignation of an independent director on Sept 11. The director in question was also the chairman of the remuneration committee and a member of the audit and risk committee and nomination committee of DRT&rsquo s manager.

 

&ldquo This leaves only three independent directors out of the six remaining directors, in breach of the statutory requirement for the majority of the board to be independent. DRTM announced that it would &lsquo endeavour to fill the vacancy within two months, but in any case, not later than three months&rsquo . Concerned investors note that to-date, no replacement independent director has been appointed,&rdquo say the investors via their statement.

 

Furthermore, a lead independent director of DRT, Tan Huay Lim, is facing a lawsuit brought by Zhang Zhencheng, whose family trust owns a major unitholding in DRT.

 

The suit alleges that Tan has failed to carry out his duties as an independent director amidst the refinancing exercise.

 

&ldquo Tan had allegedly pushed for a legally-binding MOU that would have required DRT to buy assets in China, on terms prejudicial to unitholders, at a time when the priority should have been the repayment and restructuring of the syndicated facilities,&rdquo say the investors.

 

&ldquo Against the backdrop of Sino-Ocean' s financial woes and the concerns in relation to [the trustee-manager&rsquo s] board, the petitioning investors believe that internalisation would be crucial to preserve DRT&rsquo s asset value. There would be a complete alignment of interests between unitholders and an internal trustee-manager which is wholly owned by them. Unitholders will also have a say in the board composition of the internal trustee-manager, which can enhance corporate governance. Investors are hopeful that the absence of diverging interests would also make it easier to move forward with restructuring negotiations,&rdquo they add.

 

&ldquo Investors also believe that internalisation will bring about greater cost-efficiencies and reduction in management fees, trustee fees, acquisition and divestment fees otherwise payable to the external trustee-manager, which could eventually translate into higher distributions per unit (DPU) for unitholders.&rdquo

 

Sino-Ocean could be rescued

 

According to Bloomberg, Chinese policymakers are finalising a draft list of 50 developers eligible for financial support that includes Country Garden Holdings Co and SIno-Ocean Group. Sino-Ocean Capital is a unit of Sino-Ocean Group. Increasing funding to troubled developers would ease panicked expectations of households, members of the standing committee of the National People&rsquo s Congress, said on November 22. 

 

On the other hand, when news broke, bank shares suffered declines as pressure builds on the Chinese banks to &ldquo backstop&rdquo the economy. 

 

DASIN Retail Trust has received a notice declaring that an event of default has occurred under its onshore syndicated term loan facility of up to 400 million yuan.

 

Issued by the Bank of China&rsquo s Zhongshan branch as the facility and security agent of the onshore facility, the bank is claiming an outstanding sum of 355.2 million yuan (S$66.2 million) plus interest after the term loan was said to mature on Dec 31, 2022.

 

This interest shall go on accruing until full payment is made by Dasin Retail Trust&rsquo s subsidiary, Zhongshan Yuanxin Commercial Property Management, noted the trustee-manager late on Monday (Sep 4).

 

Notices of these facilities were dated Aug 31 and issued to the trust&rsquo s subsidiaries, including Zhongshan Yuanxin.

 

Dasin&rsquo s trustee-manager said it is continuing to explore available options for the restructuring exercise with lenders under its various facilities.

 

The announcement comes weeks after Dasin Retail Trust received separate notices of default occurring under its Singapore dollar- and US dollar-denominated offshore syndicated term loan facility of up to S$430 million, as well as a Singapore dollar- and Hong Kong dollar-denominated offshore syndicated term loan facility of up to S$106.6 million.

 

Both the S$430 million offshore facility and 400-million-yuan onshore facility were used to finance the Reit&rsquo s acquisitions of its initial portfolio comprising Xiaolan Metro Mall, Ocean Metro Mall, Dasin E-Colour and Shiqi Metro Mall.

 

The S$106.6 million offshore loan facility was to finance the acquisition of Doumen Metro Mall.

 

THE Singapore Exchange Regulation (SGX RegCo) issued a &ldquo trade with caution&rdquo alert for Dasin Retail Trust on Monday (Aug 21), as its trading activity review revealed that an individual seemed to be buying units of the China retail property trust to maintain the price.

 

SGX RegCo said the trust&rsquo s closing price had stayed in the S$0.089 to S$0.094 range between Jul 17 and Aug 17 &ndash the period this individual was buying the units. 

 

The individual was not named, but SGX RegCo said that its initial findings suggest that he or she is connected to Dasin.

 

SGX RegCo said this individual&rsquo s purchasing activity was &ldquo particularly unusual and aggressive&rdquo , following negative announcements by Dasin on Aug 11 and Aug 14 regarding two notices of demand it had received.

 

The first announcement pertained to a notice of demand dated Aug 4, issued by the Bank of China&rsquo s Singapore branch, declaring that events of default had occurred, and are continuing under a certain &ldquo Offshore Facility 3&rdquo .

 

According to that announcement, the total outstanding amounts of S$55.6 million and HK$297.6 million (S$51.6 million) under the facility as at Jul 25, 2023, plus all additional interest, default interest and indemnity obligations, were immediately due and payable.

 

The second announcement related to a notice of demand dated Aug 10, issued by Maybank&rsquo s Singapore branch, declaring that one or more events of default had occurred and are continuing under a certain &ldquo Offshore Facility 1&rdquo .

 

Outstanding principal sums of US$129.9 million and S$234.1 million, plus interest of US$6.8 million and S$10.8 million as at Aug 10, were immediately due and payable, according to this announcement.

 

SGX RegCo said that between Aug 14 and Aug 17, the individual had, on seven instances when the price of Dasin units fell to intraday lows, made purchases that pushed up the unit price. 

 

In particular, when the unit price fell to an intraday low of S$0.063 on Aug 16, the individual made purchases that pushed the price up by S$0.029 or 46 per cent, and the counter ended up closing at S$0.092, SGX RegCo said.

 

&ldquo SGX RegCo has referred the matter to the authorities for their necessary actions,&rdquo it also said.

 

DASIN Retail Trust : CEDU 0% has received a notice of default occurring under a Singapore dollar and United States dollar denominated offshore syndicated term loan facility of up to S$430 million.

 

The offshore facility was announced in 2021 and 2022. Together with a 400 million yuan (S$74.8 million) onshore facility, it was used to finance the acquisitions of the trust&rsquo s initial portfolio comprising Xiaolan Metro Mall, Ocean Metro Mall, Dasin E-Colour and Shiqi Metro Mall.

 

In a bourse filing late on Monday (Aug 14), the trust said that it has received a notice dated Aug 10 by the Singapore branch of Malayan Banking in its capacity as the facility agent. 

 

The trust was notified that one or more events of default has or had occurred and are continuing under the offshore facility. 

 

On instruction of the majority lenders, the facility agent had declared that commitments were to be &ldquo cancelled and reduced to zero&rdquo upon the date of notice, and that the &ldquo loans and the accrued interest as well as all other amounts accrued or outstanding under the finance documents&rdquo are &ldquo immediately due and payable&rdquo . 

 

According to Malayan Banking, the defaulting principal sums are US$129.9 million and S$234.1 million. These, plus the accruing interest of US$6.8 million and default interest of S$10.8 million as at Aug 10, are immediately due and payable by the trustee-manager. 

 

To reiterate its announcement dated Aug 11 in relation to the default of a separate S$106.6 million offshore facility, the trust said its trustee-manager is exploring available restructuring options under the various loan facilities.

 

The trustee-manager will make further announcements if there are any material developments which warrant disclosure, the trust added. 

 

DASIN Retail Trust : CEDU 0% has received a notice of default occurring under a Singapore dollar and Hong Kong dollar-denominated offshore syndicated term loan facility of up to S$106.6 million.

 

This loan facility was to finance the acquisition of Doumen Metro Mall, and was announced by the trust in September and October last year, the trust said in a filing to the bourse late Friday (Aug 11) evening.

 

The board of directors at Dasin Retail Trust said it had received a notice dated Aug 4 issued by the Singapore branch of the Bank of China &ndash in its capacity as the facility agent of the offshore facility &ndash declaring that events of default had occurred and are continuing under the facility. 

 

Based on the continuing events of default, the facility agent had declared that commitments were to be &ldquo immediately cancelled&rdquo upon the date of notice, and that the loans and the accrued interest as well as all other amounts accrued or outstanding under the finance documents are &ldquo immediately due and payable&rdquo .  

 

The facility agent had also said the loans are immediately payable on demand. 

 

Dasin Retail Trust said the notice stated that the total outstanding amounts stand at S$55.6 million and HK$297.6 million (S$51.5 million) as at Jul 25. These amounts, all additional interest and applicable default interest changes until payment is made, and indemnity obligations arising under the finance documents are immediately due and payable by the trustee-manager. 

 

The trustee-manager is consulting with its advisers on its options with respect to the notice, and is also continuing to explore the available options in relation to the restructuring exercise with the lenders under the various facilities. 

 

The trustee-manager will make further announcements on the bourse in the event there are any material developments which warrant disclosure, the trust said. 

THE trustee-manager of Dasin Retail Trust : CEDU -19.17% (DRT) is considering selling the trust&rsquo s retail malls as it looks to restructure its loan maturities.

 

Another possible option is engaging its financial adviser FTI Consulting (Singapore) as well as JLL or any other parties to search for potential strategic investors, the trustee-manager said in its response to queries from the Singapore Exchange (SGX).

 

If the China-focused property trust opts for the disposal, it will aim to do so within a 24-month timeframe in an &ldquo orderly and structured manner&rdquo . The trustee-manager said it will continue to negotiate the terms of the debt restructuring with its lenders together with FTI.

 

SGX had queried the trust&rsquo s management on Jul 6 after the company announced that talks with a &ldquo reputable Chinese entity&rdquo for a potential memorandum of understanding (MOU) fell through.

 

The term sheet sought by DRT&rsquo s lenders had provided for the entry into the MOU to be a precedent condition. This means if the MOU did not come to fruition, further negotiations with the lenders would occur.

 

The lenders had also requested for the board to review the conduct of the trustee-manager&rsquo s chief executive Wang Qiu. They had flagged concerns on whether Wang was acting in the interest of all stakeholders, including the lenders, and if conflicts of interests are being managed appropriately.

 

This came after Wang and Zhang Zhongming, a representative of the trust&rsquo s major unitholder, attended a meeting on May 26 in which lenders were informed of the intention to discontinue FTI&rsquo s services.

 

SGX in its query had asked the board to explain the basis for the lenders&rsquo concerns over Wang. It also asked the board to disclose the outcome of such a review.

 

The board said that Wang has since clarified that she only received a request from Zhang to call for the meeting with all lenders, and that she did not make any remarks at the meeting. It added that the trustee-manager will engage the lenders to ascertain and understand their concerns, before assessing further actions.

 

DRT&rsquo s portfolio includes retail malls in China, such as Ocean Metro Mall in Zhongshan.

 

DASIN Retail Trust : CEDU -1.64%&rsquo s (DRT) net loss for the second half ended December 2022 widened to S$221.5 million from S$51.8 million in the same period a year ago, statements prepared on a going concern basis indicated.

 

On Monday (Jul 10), its trustee-manager said the greater net loss was mainly due to changes in fair value of investment properties, which resulted in a wider S$297.9 million loss from S$63.9 million in the previous year.

 

The latest set of results translates to a loss per unit (LPU) of S$0.273 compared to a H2 LPU of S$0.0661 the previous year. LPU for FY2022 amounted to S$0.3455, compared to an LPU of S$0.0626 the previous year.

 

Revenue over the half-year period declined 24.7 per cent to S$37.6 million from S$50 million in H2 FY2021. The lower topline comes amid lower contributions from all malls in the trust&rsquo s portfolio, which comprises seven retail malls providing direct exposure to the Guangdong-Hong Kong-Macau Greater Bay Area.

 

Net property income (NPI) fell 33.6 per cent to S$20.6 million from S$31 million in the previous comparative year.

 

No distribution has been declared for the period, as the trust has defaulted on loans worth approximately S$910 million.

 

Following the release of the results, minority investor advocacy group Securities Investors Association (Singapore), or Sias, issued a set of questions to DRT relating to unitholders&rsquo concerns over the results, among other matters.

 

Regarding the loan defaults, Sias asked the trust to explain to its unitholders the hurdles it faces in disposing some of its assets to deleverage and address the defaults. It also requested the trustee-manager to provide an on-the-ground update on the operating statuses of DRT&rsquo s seven malls in Guangzhou.

 

In relation to the fair value changes in DRT&rsquo s investment properties, Sias noted that the trust is now in breach of the gearing, interest-coverage and loan-to-valuation ratios required under its offshore facilities. It asked the trust to elaborate on how this would impact the refinancing of both the offshore and onshore facilities, as well as the progress that has been made in this area.

 

DRT&rsquo s full-year revenue was down 15.8 per cent to S$85.3 million from S$101.3 million in FY2021.

 

FY2022 NPI stood at S$47.2 million, down some 31.8 per cent from S$69.2 million the previous year.

 

NPI margin fell 13.1 percentage points to 55.2 per cent for FY2022, compared to 68.3 per cent previously. The trustee-manager said this was primarily due to a loss allowance on receivables, excluding which would have seen NPI margin at 75.6 per cent. 

 

In its outlook, DRT&rsquo s trustee-manager acknowledged there were material uncertainties over the trust&rsquo s ability to remit funds out of China for the payment of interest expenses for two of its offshore facilities, as well as essential offshore operating business expenses, over the next 12 months.

 

It cautioned there could be an impact on the classifications of its assets and liabilities &ndash along with the ability to realise assets at their recognised values, and extinguish liabilities at the amounts stated in the financial statements &ndash should the trust be unable to continue as a going concern.

 

As at end-2022, DRT&rsquo s total liabilities at the group level stood at S$1.3 billion, compared to S$1.4 billion in the same period a year ago.

 

In addition to its questions on the latest results, Sias asked DRT to provide an update on the proposed sale of Shiqi Metro Mall and Xiaolan Metro Mall, as well as that of any other assets.

 

It also asked the trust to clearly define the roles and responsibilities of its management team, including those of chief executive of the trustee-manager Wang Qiu and chief financial officer Steven Ng. It queried the trust on the board&rsquo s level of involvement in operational and strategic matters, as well as how effective the trustee-manager has been in handling matters of the trust &ndash especially in relation to the winding-up petition against Sino Ocean Capital in Hong Kong.

 

Earlier this month, DRT announced that talks with a &ldquo reputable Chinese entity&rdquo over a memorandum of understanding (MOU) had fallen through the MOU was related to the trust&rsquo s restructuring of its loan maturities. Sias has asked DRT to state all the options that are being explored in its restructuring, including details on the individuals who are leading the negotiations, the assets involved, and the counter-parties.

 

The group also noted that some unitholders have expressed concerns regarding the potential illegality of the transactions outlined in the MOU. It has therefore requested DRT&rsquo s board and management to provide clarity on the transactions in question, and the potential laws that might be breached.