AXIS REAL ESTATE INVESTMENT TRUST ("AXIS-REIT" OR "THE FUND") PROPOSED AMENDMENTS TO THE DEED OF AXIS-REIT ("PROPOSED AMENDMENTS")
| AXIS REAL ESTATE INVESTMENT TRUST |
|
Type | Announcement |
| Subject | AXIS REAL ESTATE INVESTMENT TRUST ("AXIS-REIT" OR "THE FUND") PROPOSED AMENDMENTS TO THE DEED OF AXIS-REIT ("PROPOSED AMENDMENTS") |
Contents :
1. INTRODUCTION
- On behalf of the Board of Directors of Axis REIT Managers Berhad, the manager of Axis-REIT ("the Manager"), Aseambankers Malaysia Berhad (“Aseambankers”) is pleased to announce that the Fund proposes to undertake the Proposed Amendments, details of which are set out below.
2. DETAILS OF THE PROPOSED AMENDMENTS
- On 15 June 2005, the Manager and the trustee of Axis-REIT ("Trustee") had entered into the Deed constituting Axis-REIT ("Deed"). The Manager proposes to amend the Deed by way of a supplemental deed to incorporate, amongst others, the following:
(i) an acquisition and disposal fee of 1% and 0.5% respectively based on the purchase and disposal consideration of the real estate assets to be paid to the Manager upon completion of the acquisition and disposal by Axis-REIT. Real estate assets refer to real estate and single purpose companies but not applicable to other authorised investments as defined in the Deed;
(ii) the total borrowing limit of the Fund and the issuance of debentures to finance acquisitions which are consistent with the new Guidance Note 2 of the Securities Commission’s ("SC") Guidelines on Real Estate Investment Trust ("Guidelines on REITs") issued on 10 July 2006; and
(iii) administrative and/or technical amendments to the Deed in accordance with the applicable laws, regulations and guidelines governing REITs.
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3. RATIONALE OF THE PROPOSED AMENDMENTS
- The key to the Fund’s growth strategy is primarily through the acquisition and disposal of real estate assets. This ensures the continuous growth of the size of the Fund and enables the Manager to enhance future distributions to unitholders. Currently, the Manager is only entitled to an annual management fee of up to 1.0% per annum of the net asset value ("NAV") of the Fund.
The proposed inclusion of the acquisition and disposal fee to be paid to the Manager is to align the interests of the Manager with those of the unitholders and incentives the Manager to accelerate the growth of the Fund’s size via asset acquisitions. This is also in line with the current global practice of other successful REITs which provides for an acquisition and disposal fee to be paid to their respective managers.
The Proposed Amendments with regards to the borrowing limits and the issuance of debentures is in line with the new Guidance Note 2 of the Guidelines on REITs issued by the SC, whilst the other amendments to the Deed are administrative and/or technical in nature to provide clarity to certain provisions of the Deed to enable the Manager and the Trustee to perform their duties and responsibilities effectively under the Fund.
- The Proposed Amendments are not expected to have any effects on the unitholders’ capital, NAV, earnings, substantial unitholders and distributable income of the Axis-REIT.
5. CONDITIONS OF THE PROPOSED AMENDMENTS
- The Proposed Amendments are conditional upon the approvals of:
(i) the Trustee, which was obtained on 12 September 2006;
(ii) the SC; and
(iii) the unitholders of Axis-REIT for the Proposed Amendments at a meeting of unitholders to be convened.
- The substantial unitholders (both direct and indirect) of Axis-REIT as at 25 August 2006 are Prestigious Landmarks Sdn Bhd ("Prestigious"), Baiduri Kemas Sdn Bhd ("Baiduri Kemas"), Crystal Properties Sdn Bhd ("Crystal Properties"), Dato’ Abas Carl Gunnar bin Abdullah, Stephen Tew Peng Hwee and Lim Kian Thiam.
The ultimate shareholders of Prestigious and Crystal Properties are Stephen Tew Peng Hwee and Lim Kian Thiam, who are also the directors of the Manager.
The ultimate shareholders of Baiduri Kemas are Dato’ Abas Carl Gunnar bin Abdullah, Stephen Tew Peng Hwee and Lim Kian Thiam, who are also the directors of the Manager.
Therefore, Prestigious, Baiduri Kemas and Crystal Properties are parties related to the Manager and shall not exercise their voting right as per clause 7.2 and 7.3 of the Deed in respect of their direct interest in Axis-REIT on the resolution pertaining to the Proposed Amendments.
The directors of the Managers who are deemed interested in the Proposed Amendments by virtue of their direct and indirect unitholdings in Axis-REIT ("Interested Manager’s Directors") as at 25 August 2006 are Dato’ Abdul Azim Mohd Zabidi, Dato’ Abas Carl Gunnar Bin Abdullah, Lim Kian Thiam, Stephen Tew Peng Hwee, Dato’ Mohamed Salleh Bajuri and Alex Lee Lao. Similarly, the Interested Manager’s Directors shall not exercise their voting rights in respect of their direct and indirect unitholdings in Axis-REIT as per clause 7.2 and 7.3 of the Deed pertaining to the resolution on the Proposed Amendments.
Prestigious, Baiduri Kemas, Crystal Properties and Interested Manager’s Directors shall ensure the persons connected to them will not vote in respect of their direct and indirect unitholdings in Axis-REIT on the resolution pertaining to the Proposed Amendments.
Save as disclosed above, none of the directors of the Managers or the substantial unitholders or persons connected to them has any direct and/or indirect interest in the Proposed Amendments.
- The Manager is deemed interested in the Proposed Amendments pursuant to the proposed acquisition and disposal fee to be paid to the Manager. Hence, the Manager is not in the position to recommend the Proposed Amendments. However, the Trustee, OSK Trustees Berhad has, vide its letter dated 12 September 2006, stated that it has no objection to the Proposed Amendments subject to the Guidelines on REITs, the approvals of the SC and the unitholders.
- The application to the relevant authorities for the Proposed Amendments is expected to be submitted within two (2) months from the date of this announcement.
This announcement is dated 12 September 2006.
Announcement Info
| Company Name | AXIS REAL ESTATE INVESTMENT TRUST |
| Stock Name | AXREIT |
| Date Announced | 12 Sept 2006 |
| Category | General Announcement |
| Reference No | CU-060912-48115 |
