MI-REIT, Cambridge – TODAY
CIT, NAB in talks to fund MI Reit
Cambridge Industrial Trust (CIT) chief executive Chris Calvert said the company is in talks with its majority stakeholder, National Australia Bank (NAB), about potentially funding any recapitalisation of MacarthurCook Industrial (MI) Reit.
NAB is currently working in different capacities with both Singapore-listed property trusts but says it has appropriate measures to prevent conflicts of interest arising in this situation.
NAB acquired a 56-per-cent stake in CIT in August last year and has acted as a financier to the group. It is also serving as a financier and underwriter to MI Reit on a number of recapitalisation transactions to help address the Reit’s critical funding issues.
MI Reit’s recapitalisation plans include a rights issue in which NAB is one of the underwriters.
CIT, which acquired a key 9.8-per-cent stake in MI Reit earlier this month, launched a push to gain control of the trust’s management this week. It also vowed to block MI Reit’s recapitalisation plans at an extraordinary general meeting next Monday, calling them “massively value-destructive”.
While CIT has yet to announce where it plans to source this funding, Mr Calvert told Dow Jones in a Tuesday interview that it is talking with NAB and other banks about prospective arrangements.
“We would obviously like them to be part of the debt solution for our alternative and we would look to engage with them post this EGM to reach an appropriate solution. There have been discussions with the existing banks and we have no reason to believe that they wouldn’t want to enter into discussions with us to refinance the portfolio should this (recapitalization) EGM get voted down,” he said.
He said any “respective conflict issues” were a matter for NAB.
Yesterday, CIT said in a statement that it has no plans to merge itself with MI Reit.
It is “in the process of finalising refinance and equity solutions” to address problems facing MI Reit while preserving its value for existing unitholders, the statement added.
After releasing its statement, CIT asked for trading of its units to be halted.
In July, NAB, through its wholly owned Antares nabInvest Trust, bought S$5.3 million worth of units in a S$28 million CIT private placement.
Of the S$28 million raised, CIT says $10.3 million has been used for the acquisition of its stake in MI-Reit, which was made in a series of purchases shortly after the Reit announced its recapitalization plans Nov. 6.
A NAB spokeswoman said while the bank does have lending, underwriting and bookrunning relationships with MI-Reit it has “appropriate conflict management arrangements between the business supporting MacarthurCook Industrial Reit and any NAB personnel involved with Cambridge Industrial Trust.”