Far East Hospitality Trust Secures S\$101.4 Million Sustainability-Linked Loan: Key Shareholder Implications

Overview

Far East Hospitality Trust (“FEHT”), comprising Far East Hospitality Real Estate Investment Trust (“Far East H-REIT”) and Far East Hospitality Business Trust (“Far East H-BT”), has announced that DBS Trustee Limited, in its capacity as trustee of Far East H-REIT, has entered into a S\$101.4 million sustainability-linked facility agreement with an institutional bank on 11 December 2025.

Key Highlights of the Facility Agreement

• Facility Size: S\$101.4 million sustainability-linked loan granted to FEHT via DBS Trustee Limited.
• Disclosure Requirement: Announcement is made under Rule 704(31) of the Singapore Exchange Listing Manual, which requires disclosure of loan conditions that may affect control of the company.
• Change of Control Provisions: The facility agreement contains several conditions that could trigger early repayment if a “Change of Control Event” occurs.

Change of Control Triggers—Investor Impact

The agreement includes several key provisions that shareholders and investors should note, as they could have significant impact on the trust’s financial position and potentially its share price:

1. Ownership of REIT Manager: If the REIT Manager (FEO Hospitality Asset Management Pte. Ltd.) ceases to be majority owned—directly or indirectly—by the Far East Organization group, the estate, or immediate family members of the late Mr. Ng Teng Fong, the lender may require immediate repayment, unless lender consent is obtained.
2. Stapled Securities Ownership: If the Far East Organization and/or the Immediate Family Members collectively cease to own at least 30% of the stapled securities in Far East Hospitality Trust, the lender may require repayment, unless prior consent is given.
3. Change of Manager: If the REIT Manager resigns or is removed and the replacement is not majority owned by the Far East Organization and/or the Immediate Family Members, or lender consent is not obtained, the lender may require repayment.

Potential Financial Impact

Should a Change of Control Event occur, and if this triggers a cross-default under other borrowings, the total facilities that could be affected is approximately S\$747.1 million (excluding interest and fees). This is a material amount relative to the Trust’s leverage and could significantly impact liquidity, refinancing risk, and possibly the share price.

Current Status and Shareholder Reassurance

• No Breach: As of the date of announcement, there has been no breach of these conditions.
• Board Confirmation: The announcement is formally issued under the authority of Gerald Lee Hwee Keong, CEO and Executive Director of both the REIT Manager and the Trustee Manager.

Implications for Shareholders

Why This Matters: The existence of such change of control provisions introduces an element of risk for shareholders. Any material change in ownership or management, without lender consent, could result in the Trust having to repay substantial borrowings on short notice. This could affect the Trust’s liquidity, credit rating, and ultimately, its share price. Investors should actively monitor any announcements regarding changes to the ownership structure or management of Far East Hospitality Trust.

Conclusion

The S\$101.4 million sustainability-linked facility agreement includes important change of control triggers that could result in repayment obligations not only on the new facility but also on up to S\$747.1 million of existing borrowings. At present, no breaches have occurred. However, shareholders are advised to be vigilant, as any changes to the controlling ownership or manager without lender consent could have price-sensitive repercussions.

Disclaimer: This article is intended for informational purposes only and does not constitute financial advice or a recommendation to buy or sell any securities. Investors should consult with their financial advisers and review the company’s official disclosures before making any investment decisions.

View Far East HTrust Historical chart here