EC World REIT Faces Uncertainty Amid Sponsor Forchn Holdings’ Reorganisation and Massive Outstanding Claims

Key Points for Investors

• Forchn Holdings Group Co., Ltd., the sponsor of EC World REIT, is undergoing a court-supervised reorganisation in China.
• EC World REIT has submitted claims totalling over RMB 1.1 billion against the Sponsor and its entities, including substantial outstanding rental receivables and contingent liabilities.
• The outcome of the reorganisation process remains uncertain and could potentially result in a change of control for EC World REIT.
• Management cautions unitholders to exercise care in dealing in the Units, as the process may materially affect unit values and the future of the REIT.

In-Depth Report

EC World Asset Management Pte. Ltd., manager of EC World Real Estate Investment Trust (“EC World REIT”), has provided a significant update regarding the ongoing reorganisation of its sponsor, Forchn Holdings Group Co., Ltd. This development is highly relevant for investors, as it introduces considerable uncertainty regarding EC World REIT’s near-term prospects and potentially its control and ownership structure.

Background: Forchn Holdings’ Reorganisation

The manager previously announced the commencement of reorganisation proceedings by Forchn Holdings, which is now under court supervision in China. On 25 September 2025, EC World REIT’s legal counsel in China attended the first creditors’ meeting, held online by the Fuyang Court. This meeting focused on the administrator’s work report, the status of claims, the debtor’s property holdings, and key draft plans relating to asset management, disposal, and overall reorganisation.

Massive Claims Submitted by EC World REIT

EC World REIT has filed several major claims against the Sponsor and its related entities:

• Outstanding rental receivables: RMB 318.2 million
• Preliminary claims (contingent liabilities from Beigang Stage 2 Litigations): RMB 330.7 million
• Other receivables (including late penalty interest, land use right claims, and receivables from novation processes): RMB 225.1 million
• Contingent liabilities over unauthorized mortgage: RMB 268.6 million

These claims collectively exceed RMB 1.1 billion, underscoring the financial exposure EC World REIT faces as a result of its relationship with the Sponsor.

Voting and Next Steps

During the creditors’ meeting, several resolutions were presented for voting, including the approval of the administrator’s plans and the election of members to the creditors’ committee. Based on legal advice, EC World REIT will vote in favor of these high-level, routine resolutions and will seek to have its subsidiaries represented on the creditors’ committee to safeguard its interests.

Critical Uncertainties and Shareholder Warnings

The manager has explicitly warned that there is no certainty regarding the success of the reorganisation process. If the reorganisation is completed, there is also no assurance that it will not result in a change of control for EC World REIT, depending on the final outcome for the Sponsor. Such a change could have profound implications for the REIT’s strategic direction, management, and ultimately, unitholder value.

Shareholders and investors are strongly advised to exercise caution. The manager will release further updates as material developments arise, but in the interim, unitholders should consult professional advisers if they are unsure about their investment actions. The current situation could have a direct and possibly significant impact on the price and liquidity of EC World REIT units, given the scale of the claims and the potential for a change in sponsor control.

Market Implications

Given the magnitude of the outstanding claims and the uncertainty surrounding the sponsor’s reorganisation, this is a highly price-sensitive event. The risk of impairment to EC World REIT’s financials, the potential for structural changes, and the possibility of sponsor control shifting all pose significant implications for current and prospective investors.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. The value of EC World REIT units and the income derived from them may rise or fall. Investors should consult their own professional advisers before making any investment decisions. The past performance of EC World REIT is not indicative of future results. Forward-looking statements in this article are subject to risks and uncertainties, and actual results may differ materially.

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