Eagle Hospitality Trust Faces Final Termination: Singapore Court Confirms No Value Left for Stapled Securityholders

Key Highlights from DBS Trustee Limited’s Announcement

• Singapore Court Confirms Termination Rights: DBS Trustee Limited, acting as trustee for Eagle Hospitality Real Estate Investment Trust (“EH-REIT”), has received definitive confirmation from the Singapore Court that it is empowered to terminate EH-REIT without further applications or legal actions.
• No Further Legal Hurdles: The trustee does not need to undertake additional proceedings or actions under the EH-REIT Trust Deed or to the Singapore Court to effect the termination.
• Funds Transfer to Liquidating Trust: Any remaining funds in Singapore will require a specific application to the Singapore Court to obtain leave for repatriation to the Liquidating Trust, as mandated by the Confirmed Plan and Confirmation Order.
• Zero Distribution to Stapled Securityholders: Crucially, the termination process will result in no distribution to stapled securityholders. All remaining assets are required to be distributed to the beneficiaries of the Liquidating Trust under the confirmed restructuring plan.
• Ongoing Updates: The REIT Trustee has committed to providing further material updates, but advises securityholders to consult their financial advisers due to the lack of certainty or assurance of receiving any value from the winding up of EH-REIT.

Investor Impact and Price-Sensitive Information

This announcement is highly price sensitive and potentially negative for Eagle Hospitality Trust investors. The explicit statement that there will be no distribution to stapled securityholders upon termination is a critical development. Investors in EHT should be aware that the value of their investment is now expected to be zero as the winding-up process completes. This is a clear signal for investors to reassess their positions, as there is no prospect of recovery or payout from the trust’s remaining assets.

Detailed Overview of the Termination Process

The REIT Trustee’s actions are rooted in recent clarifications from the Singapore Court, which have removed any procedural uncertainties regarding EH-REIT’s termination. The court’s confirmation allows the trustee to proceed directly, only requiring a separate application if funds need to be moved out of Singapore to the Liquidating Trust. The Confirmed Plan explicitly states that all remaining assets will go to the beneficiaries of the Liquidating Trust, leaving stapled securityholders with no entitlement to any residual value.

Further, the announcement stresses that there is no guarantee or assurance of any value to be received by stapled securityholders. This is a significant development and underscores the severity of the situation. The Trustee urges securityholders to consult professional advisers for guidance on their next steps.

Additional Considerations for Investors

• Trading Implications: While EHT stapled securities remain listed on the SGX-ST, the listing does not guarantee liquidity or any recovery of value, especially in light of the winding-up announcement.
• Regulatory and Legal Risks: The announcement includes a reminder that EHT securities are not guaranteed by the trustees or their affiliates, and investors face the risk of total loss of principal.
• Forward-Looking Statements: The Trustee cautions against reliance on any projections or forecasts, given the uncertainties facing EHT.
• Jurisdictional Restrictions: The announcement is not to be distributed outside Singapore, and the stapled securities have not been registered in the United States.

Conclusion

Investors in Eagle Hospitality Trust face the reality of a complete loss of value as the termination process concludes, with all remaining assets earmarked for the Liquidating Trust and none for securityholders. This material update should prompt immediate attention from investors and may have a profound impact on EHT’s share price and trading activity.

Disclaimer

This article is for informational purposes only and does not constitute investment advice or an offer to buy or sell securities. Investors are urged to consult with professional financial advisers before making any decisions. The information herein is based on the latest available announcements and may be subject to change without notice.

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