Sasseur REIT Announces Entry into RMB639 Million Onshore Facility Agreements for Early Refinancing

Sasseur Real Estate Investment Trust (Sasseur REIT), managed by Sasseur Asset Management Pte. Ltd., has announced a significant financial development that could impact its future operations and potentially influence the value of its units. The REIT’s wholly-owned China subsidiaries, Chongqing Sasseur Suge Apparel Joint Stock Co., Ltd and Sasseur (Chongqing) Business Co., Ltd, have entered into five-year onshore secured facility agreements with a local lender.

Key Points for Investors

• Facility Details: The total available onshore term loan facilities amount to RMB639 million. These facilities are intended for early refinancing of existing secured onshore loans due in March 2028. The refinancing is expected to be at a more competitive cost, which could enhance Sasseur REIT’s interest expense efficiency and improve its financial flexibility.
• Terms and Conditions: Utilisation of the new facilities is subject to specific conditions outlined in the agreements. Notably, there are provisions and restrictions tied to the shareholding interests of the controlling shareholder of the onshore borrowers.
• Mandatory Prepayment Events: The facility agreements stipulate that the following will trigger mandatory prepayment:
  • If the onshore borrowers cease to hold 100% interest in their respective outlets.
  • If Sasseur Cayman Holding Limited (the sponsor of Sasseur REIT) ceases to hold effective control, either directly or indirectly, over the onshore borrowers.

  If these conditions are breached, the lender may cancel the facilities and require immediate repayment of outstanding loans and accrued interest. The affected amount could be up to RMB639 million (excluding interest) if the facilities are fully drawn.

• Current Status: As of the announcement date, none of these conditions have been breached.

Potential Price-Sensitive Information

• Refinancing at More Competitive Cost: By securing early refinancing at better terms, Sasseur REIT could potentially improve its net income and distribution per unit, which is a positive for investors.
• Change of Control Clauses: The facility contains clauses that could result in a rapid repayment obligation if there is a change in control of the outlets or the sponsor. This introduces a potential risk factor for shareholders, as any corporate actions affecting ownership or control could trigger significant financial liabilities.
• Aggregate Exposure: The total exposure related to these facility agreements is RMB639 million. If the conditions are breached, this entire amount (excluding interest) could become immediately due, posing a material risk to the REIT’s liquidity.
• Market Impact: The announcement and its terms, particularly the competitive refinancing and the change of control risks, are material events that investors should monitor closely. These factors could affect Sasseur REIT’s share price and unit value.

Additional Information for Unitholders

• The units of Sasseur REIT are not guaranteed by the manager, trustee, sponsor, or their affiliates. Investments in the units are subject to risks, including the possible loss of principal.
• Unitholders cannot request redemption or purchase by the manager; units can only be dealt with via trading on the SGX-ST. There is no guarantee of liquidity for the units.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. The value of Sasseur REIT units and any income derived from them may fluctuate. Investors should consider their own risk tolerance and seek professional advice before making any investment decisions. The manager, trustee, sponsor, or their affiliates do not guarantee returns or principal.

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