The Executive Chairman of Soilbuild Group Holdings, Lim Chap Huat, in association with Blackstone Real Estate has reportedly raised a proposal for taking Soilbuild Reit (Soilbuild Business Space Reit) private at the rate of S$0.55 for every unit. The proposed delisting and privatization will be brought into effect through a trust scheme of arrangement, claimed the manager of Soilbuild Reit.
For the scheme, a newly incorporated entity called the Clay Holdings III will be the offeror. Clay Holdings II, held by Mr. Huat, owns the entity, along with Clay Holdings I, which is an entity founded through funds managed by Blackstone Real Estate affiliates.
Roy Teo, Soilbuild Reit’s Chief Executive Officer, stated that the economic impact on the performance of the Reit this year up until the third quarter has been silenced as the government has provided a lot of grants and assistance to the tenants. The uncertainty really commences from the fourth quarter towards the next year and could effectively come from people working from home, along with the office and business park environments, added Teo.
A delisting is speculated to enable the Reit manager to not be limited by the present leverage limit of 50 per cent, introduced by the Monetary Authority of Singapore. The delisting will also allow the Reit to gain more flexible access to capital markets. While the offeror does not aim upon the introduction of any major changes presently to the Reit business, it will stay open to any opportunities that would come along.
The scheme consideration constitutes a premium of nearly 34.5 per cent for one month, 34.8 per cent for three months, 53.2 per cent for six months, and 29.1 per cent for a period of 12 months up to and inclusive of August 31, over the volume-weighted average price for every Soilbuild Reit unit.