MI-REIT, Cambridge – TODAY
Transparency questions
MI-Reit managers make statements about rival CIT
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.