EC World REIT Issues Critical Update on FY2025 Financial Statements and Going Concern Status

EC World Real Estate Investment Trust (“ECW”) has issued a detailed update that is highly significant for current and prospective shareholders. The manager, EC World Asset Management Pte. Ltd., has provided a comprehensive status report regarding the preparation and basis of its financial statements for the financial year ended 31 December 2025.

Key Points in the Report

• Review of Going Concern Assumption: The Manager initially adopted the going concern assumption in the unaudited FY2025 financial statements, even though the ability of ECW and its group to continue as a going concern was inconclusive due to various factors. The Manager indicated that it was reviewing the validity of this assumption.
• Lack of Favourable Response from Lenders: After attempting to seek clarity from both onshore and offshore lenders, the Manager has not received any favourable responses regarding the refinancing or extension of relevant facilities.
• Switch to Realisation Basis: Given the uncertainty, the Board has determined that it may not be appropriate to continue using the going concern assumption. The FY2025 financial statements will instead be prepared on a “realisation basis” (liquidation basis), which is a major change and signals significant risk.
• Potential Financial Impact: Preparing on a realisation basis could result in substantial adjustments to assets and liabilities, including reclassification of non-current assets and liabilities to current, and possible recognition of further liabilities.
• Timeline for Revised Statements: Revised FY2025 financial statements are expected to be released on or about 31 March 2026. The auditors will conduct their review based on these revised statements.
• Ongoing Negotiations: The Manager continues to negotiate with lenders and may reassess the financial statement preparation basis if more clarity is obtained.
• Caution to Unitholders: The Manager has advised unitholders to exercise caution and refrain from taking any action regarding ECW units that may be prejudicial to their interests, until further announcements are made.

Critical Information for Shareholders and Investors

This announcement is highly price sensitive and could have a material impact on the value of EC World REIT units for several reasons:

• Change in Financial Statement Basis: The switch to a realisation basis signals doubts about the REIT’s ability to continue as a going concern. This could lead to significant write-downs of asset values and recognition of liabilities that affect the net asset value and future distributions.
• Uncertain Debt Situation: The lack of favourable feedback from lenders regarding refinancing or debt extension introduces uncertainty regarding the REIT’s ability to meet its obligations, increasing the risk of potential default or forced asset sales.
• Potential for Substantial Losses: A realisation basis typically involves valuing assets and liabilities based on amounts expected to be realised within 12 months, which may be much lower than their book value under a going concern assumption.
• Ongoing Review and Further Announcements: The Manager will continue to provide updates as necessary, and any developments could further impact the share price.

What Should Unitholders Do?

• Exercise Caution: Unitholders and potential investors should not take any precipitous action and are strongly advised to consult their financial and legal advisers for personalised guidance.
• Monitor Announcements: Pay close attention to further disclosures on SGXNET, as material developments will be announced in compliance with listing rules.

Important Notice to Investors

• The value of EC World REIT units and derived income may fall as well as rise. The units are not guaranteed or secured by the Manager, Trustee, or their affiliates.
• Investments in the units are subject to risks, including the potential loss of principal. Units can only be traded on SGX-ST; there is no redemption right with the Manager.
• Past performance is not indicative of future performance.
• This announcement contains forward-looking statements that involve risks and uncertainties. Actual outcomes may differ materially from those anticipated.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. Investors should consult their own financial, legal, and professional advisers before making any investment decisions. EC World REIT’s financial situation is subject to significant uncertainties, and material changes could occur. The information is based on the latest available company disclosures as of 10 March 2026.

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