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EAGLE Hosp Reit US$ @$0.780 cents
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FrancisLim
Elite |
22-Sep-2023 10:13
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DBS Bank Ltd. was the Sole Financial Adviser and Issue Manager for the initial public offering of Eagle Hospitality Trust (&ldquo EHT&rdquo ). Also, the secured syndicated lender and DBS Trustee, the Trustee of the Reit. The Edge - sept 21, 2023 (Quote) Not long after the IPO, various substantial shareholders, including DBS, which arranged the listing, began to cut their respective stakes. This triggered further scrutiny on this counter, made worse by the pandemic that started in early 2020. This then led EHT, controlled by Howard Wu and Taylor Woods, to default on loans totalling some US$341 million. The case is seen as a dent in the reputation of Singapore&rsquo s REITs market, which has gained popularity among investors, and for having attracted overseas assets to list here. In its update, MAS says that it is in the process of reviewing the large amount of documents seized and information obtained in the course of the investigation and has sought advice from industry experts on the EHT case. (Unquote) Clearly as being the sole financial adviser, arranger and secured lender and Trustee.. it should be held accountable. It relied on professional advice, then it is for DBS to go after the advisor. |
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FrancisLim
Elite |
21-Nov-2022 09:23
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The Edge Nov 17, 2022 " In their statement, authorities said they investigated DBS Bank Ltd, Singapore&rsquo s biggest lender, for its role as issue manager in the 2011 offer of S$200 million (US$146 million) preference shares. They said &ldquo no further action will be taken after reviewing the evidence obtained&rdquo . The outcome of Acra&rsquo s inspection of the audits conducted by KPMG LLP, who was Hyflux&rsquo s auditors, will be finalised in due course, according to the statement." The Authorities should also look at DBS mutiple roles in EHT. |
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shk363
Elite |
26-Aug-2022 11:19
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even big banks cannot be trusted.
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FrancisLim
Elite |
26-Aug-2022 10:43
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When questioned about the due diligence conducted by " DBS Trustee and DBS Bank & ndash which was one of the bookrunners and underwriters & ndash in the lead-up to the IPO, a spokesperson said the due diligence carried out by DBS Bank was & ldquo guided and supported with advice provided by an experienced team of external professional parties& rdquo .
Such parties included reporting accountants, independent valuers, an independent market research consultant and legal advisers, the spokesperson said."
The Regulators need to look at the Bank' s roles - fingers all over in this short-lived IPO. Also, the Bank was in the syndicated loan and due to its secured status, probably got fully repaid. Do they rely on the same advisors? Whether a class action could be taken against the Bank and in turn, the Bank can go after its so called professional advisors. As pointed in BT, many critical factors were not disclosed that should be disclosed in the IPO. In fact, if these were highlighted, the IPO would not be approved. Get to the bottom of this failed IPO - within 6 months |
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Joelton
Supreme |
26-Aug-2022 10:24
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EHT&rsquo s largest creditor speaks of disappointment as hospitality trust winds up
THE winding-up process of Eagle Hospitality Trust (EHT) has shed light on certain details of the lead-up to the group&rsquo s bankruptcy, particularly the role of Urban Commons as master lessee in the downfall of the trust. And at least 1 creditor is disappointed with how the affair has been handled from start to finish.
EHT is a stapled trust comprising Eagle Hospitality Real Estate Investment Trust (EH-Reit) and the dormant Eagle Hospitality Business Trust. It was listed on the Singapore Exchange (SGX) in May 2019, tanked upon its debut, and was suspended in March 2020.
A number of the trust&rsquo s units had filed for Chapter 11 Bankruptcy protection in the United States in January last year. They later filed a plan for liquidation, with bank lenders mopping up the bulk of the proceeds.
In the course of the liquidation, investigations revealed numerous lapses in governance and difficulties that were not disclosed to investors.
Alan Tantleff, Eagle Hospitality Reit&rsquo s chief restructuring officer, noted in a declaration filed on Jan 19, 2021 that the master lessees of the hotels in the Reit&rsquo s portfolio had failed to pay rent as early as January 2020.
And even before January 2020, the master lessees had begun to default on payment obligations under their hotel management agreements (HMAs). These defaults eventually resulted in the closure of 15 out of 18 hotels by the end-May 2020, said Tantleff.
There was also some US$52.9 million worth of unmet obligations to various parties, including vendors, contractors and taxing authorities &ndash which led to the commencement of litigation and the imposition of statutory liens against some of the hotels. Some of these failures to pay dues occurred early on, before, or around the time of EHT&rsquo s listing.
Contrary to claims made by EHT in various communications, the Reit&rsquo s failure was not due to the negative impact of Covid-19. According to findings disclosed in Tantleff&rsquo s declaration, certain managers of EHT-owned hotel properties decided to close their hotels because Urban Commons-linked entities had failed to fully fund operating expenses, and not because business volumes necessitated a closing.
These disclosures have left creditor and former unitholder Frank Yuan disappointed in the listing process for EHT and the subsequent management of its liquidation.
Yuan is chief executive of ASAP Holdings &ndash a California-based acquisition advisory and asset management firm specialising in hotel assets &ndash and had sold 6 hotels to EH-Reit&rsquo s sponsor Urban Commons ahead of EHT&rsquo s initial public offering (IPO).
His family members, Norbert Yuan and Jerome Yuan, are listed as ASAP Holdings&rsquo chief operating officer and chief investment officer on the company&rsquo s website.
As a long-time investor in hospitality properties in the US, Yuan noted that the pandemic did create problems for hotel owners. But, he added, not many of these hotel owners were bankrupted.
In an interview with The Business Times (BT), Yuan said he was &ldquo pushed into a corner&rdquo in the lead-up to EHT&rsquo s IPO.
The cost of the ASAP6 portfolio was in the range of US$225 million to US$250 million, said Yuan. The agreement between the Yuans and Urban Commons&rsquo owners Taylor Woods and Howard Wu was that ASAP Holdings would be paid upon EHT&rsquo s successful IPO.
Two days before the listing, however, Yuan said Wu approached him in his Singapore hotel room to take over a US$89 million syndicated loan that was initially promised by the Bank of China to EHT. If Yuan did not take on the loan, the IPO would have failed.
&ldquo As a seller, we already prepared how (we were going) to use our proceeds as well,&rdquo said Yuan, who agreed to give EHT the loan. &ldquo So I&rsquo m pushed into a corner either I take it or the IPO fails.&rdquo
Yuan also said Wu and Woods did not have enough money to pay ASAP Holdings for the 6 hotels, so Urban Commons offered the Yuans EHT&rsquo s stapled securities as payment. But on May 25, 2019, EHT began trading on the SGX, but had a dismal debut with shares ending 6.4 per cent lower that day. &ldquo I wish I could have said no at that time I would still have my 6 hotels,&rdquo said Yuan.
He disagrees with the decision to sell the hotels in the thick of the pandemic, suggesting it would have been wiser for EH-Reit to &ldquo sell a few hotels&rdquo and reduce its debt.
&ldquo If you sell a couple of large hotels and pay (the banks) US$200 million ... then you don&rsquo t have a debt, and you can hang in there,&rdquo he said.
&ldquo A prudent operator should have saved the assets, because that&rsquo s your value. Your value is not these legal documents, it&rsquo s your properties.&rdquo
Yuan said EHT&rsquo s properties are all in &ldquo good locations and cities&rdquo . For ASAP Holdings&rsquo properties, he said the company worked with the lender to either defer interest payments, for instance.
CBRE&rsquo s Asia-Pacific head of hotels and hospitality, capital markets, Steve Carroll said it took the US market around 18-24 months to recover from the brunt of the pandemic.
Revenue per available room (RevPar) fell about 50 per cent over the peak of the pandemic. Much of this was due to a fall in demand for both the luxury segment, as well as the upper end of the upscale segment &mdash both of which are heavily reliant on international arrivals in the US market.
Overall revenues for US lodgings reached pre-pandemic levels by mid-2021, and returned to the pre-pandemic growth trend by mid-2022, he said.
&ldquo Despite a slowdown in new hotel construction and the current high-inflation economy, CBRE forecasts a full recovery in average daily rate this year, and in demand and RevPar next year for the US market,&rdquo Caroll said.
Yuan also wonders what went wrong at the point of the IPO, adding that it is &ldquo unheard of&rdquo for a listed company to fail in 6 months.
Indeed, many other investors were left reeling from the sudden crash of EHT. Another investor who spoke to BT on the condition of anonymity said a number of things were &ldquo not disclosed at all&rdquo in the lead-up to the listing &ndash including many interested party transactions, or transactions that had a conflict of interest.
&ldquo If all these transactions had been made known, I don&rsquo t think EHT would have been allowed to list in Singapore,&rdquo he said.
The transactions between the Yuans and Urban Commons were, in fact, among the list of things not disclosed in full during the prospectus.
Later, when queried by Singapore Exchange Regulation, EH-Reit&rsquo s manager said the Yuans were introduced by Urban Commons to the placement agents during the bookbuilding process for the IPO.
The Yuans had also subscribed for stapled securities in the placement tranche at the IPO price of US$0.78 per stapled security as part of a bookbuilding process by the placement agents, EH-Reit&rsquo s manager said then.
According to bourse filings, Frank Yuan received 141.44 million stapled securities, or a stake of 16.3 per cent, through his wholly-owned company Claydon Hill Investments. Norbert Yuan, meanwhile, took a stake of 13.83 per cent or some 120 million stapled securities through his wholly-owned company Compass Cove Assets.
Filings showed that Claydon Hill sold 10 million EHT stapled securities on Aug 19, 2019, at US$0.70 apiece. Compass Cove sold 5 million stapled securities at US$0.675 apiece on Oct 8, 2019.
Compass Cove eventually ceased to be a substantial shareholder of EHT in December 2019, while Claydon Hill ceased to be a substantial shareholder in March 2020.
According to SGX rules, investors who are connected to the IPO sponsor have a 6-month moratorium on their shareholdings. Rules also state that the shares of a promoter for the IPO also have a moratorium of at least 6 months after listing, and no less than half of the original shareholding can be sold during the next 6 months.
Another fact that only became known later was that various contracts between the master lessees and the hotel managers were worded in a way that left the owners of the hotels at risk of liability.
And some other agreements that were supposed to be reassigned from the property owners to the master lessees for the purpose of the IPO were not, &ldquo despite representations and obligations to do so&rdquo .
Various other incidents arising from the investigations showed a pattern of behaviour in which Woods and Wu used EHT units to benefit Urban Commons master lessees, said Tantleff.
In an e-mail to BT, Wu declined to comment on matters relating to the Yuans and directed BT to DBS and other banks who provided EHT with syndicated loans instead.
In response to a query from BT, an SGX spokesperson said the exchange is unable to comment on &ldquo alleged rule breaches in relation to EHT&rdquo given the ongoing investigations for possible offences under the Securities and Futures Act.
DBS Trustee, meanwhile, told BT that it is &ldquo not privy to the private commercial discussions between Urban Commons and ASAP Holdings&rdquo .
When questioned about the due diligence conducted by DBS Trustee and DBS Bank &ndash which was one of the bookrunners and underwriters &ndash in the lead-up to the IPO, a spokesperson said the due diligence carried out by DBS Bank was &ldquo guided and supported with advice provided by an experienced team of external professional parties&rdquo .
Such parties included reporting accountants, independent valuers, an independent market research consultant and legal advisers, the spokesperson said.
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moonsun
Veteran |
26-Aug-2022 10:23
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https://www.businesstimes.com.sg/companies-markets/ehts-largest-creditor-speaks-of-disappointment-as-hospitality-trust-winds-up
Tis whole sage is a nightmare for investors from start to end.. seems like no closure and those scam directors n ceo got away .. will definitely encourage more such ipos to list here due to lack of enforcement and regulatory action. Dydd ? gd luck |
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prophetjul
Master |
20-Jun-2022 13:33
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Sounds like lots of conflicts of interest and financially incestous transactions by DBS.
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FrancisLim
Elite |
20-Jun-2022 10:50
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" DBS Bank Ltd., which is also one of the trust' s cornerstone investors, was the sole financial adviser and issue manager of Eagle Hospitality' s IPO. The bank is also one of the joint global coordinators, joint book runners and underwriters of the offering," Also, syndicated secured lender, trustee... Awaiting for the authorities' investigation report on this debacle. |
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FrancisLim
Elite |
20-Jun-2022 10:33
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May 9 and May 25, same month.
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uiop1223
Supreme |
09-Jun-2022 16:49
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Only buy reits with T as unit hol | ||||
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Kandee
Senior |
09-Jun-2022 11:39
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I believe ARA US Hospitality Trust is the first USD and fully US based hospitality REIT. It was listed one week before EHT
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prophetjul
Master |
09-Jun-2022 09:48
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Not familair with Hyflux case but Eagle' s case is pure FRAUD. There is fraud from the listing onwards. Whereas Hyflux was more of mismanagement of their investments and debt.
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moonsun
Veteran |
08-Jun-2022 23:34
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So long as sgx regco is part of sgx, they have a conflict of interest. To regulate n attract listings..
Dun expect regco to do a gd job given resources limitations n constraints i think. Have to petition for a separate more powerful body that mean business. Even estate agents can be fined more than 1 mil in recent case . But rogue ceo or directors gone scot free or get away with peanuts.. this is sending wrong message to scammers.. Sgx regco is getting to b a big joke unfortunately?
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mrwise
Supreme |
08-Jun-2022 22:19
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same like hyflux case??? Who will be the next??? So what is the regulator actions?? the robbers not caught after all in Hyflux case and many uncle and auntie lost huge amt of their life savings....
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FrancisLim
Elite |
08-Jun-2022 16:58
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Lets await for the Regulator, the Authority' s conclusion of their investigations and their findings. After all, this was touted as the maiden USD and fully USA based hospitality assets Reits... |
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prophetjul
Master |
02-Jun-2022 21:19
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Looks like it will be swept under the carpet. DBS makes their millions and gets away Scott free.
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FrancisLim
Elite |
02-Jun-2022 19:00
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Surely, the Authority would also review the role of the FI which brought this must touted first USA Hospitality Trust to SGX. The FI has its prints all over this IPO.. and the loan syndication.. DBS Trustee Limited, in its capacity as trustee (the " REIT Trustee" ) of Eagle Hospitality Real Estate Investment Trust (" EH-REIT" ), wishes to provide an update to stapled securityholders (the " Stapled Securityholders" ) of Eagle Hospitality Trust (" EHT" ) on the confirmation of the Chapter 11 Plan by the United States Bankruptcy Court under the Chapter 11 process. DBS Bank was the sole financial advisor and issue manager for the initial public offering of Eagle Hospitality Trust. It added that while DBS Bank is a lender in the US$341 million syndicated loan granted to EH-Reit, |
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prophetjul
Master |
29-May-2022 07:48
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moonsun
Veteran |
27-May-2022 18:47
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Now its 27 may 2022. Nearly 2 years.
By now, they already destroyed much evidence and fly back lor.. investigation? Not sure can get anything.. sigh..
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uiop1223
Supreme |
27-May-2022 12:35
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How about DBS? | ||||
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