We refer to the Hotel Master Lease made between RHB Trustees Berhad as Trustee for SUNREIT (“the Lessor”), Sunway REIT Management Sdn Bhd as the Manager for SUNREIT (“the Manager”) and Sunway Resort Hotel Sdn Bhd (“SRHSB” or “the Lessee”), a wholly-owned subsidiary of Sunway City Sdn Bhd (“SunCity”) which in turn is a wholly-owned subsidiary of Sunway Berhad (“Sunway”) (“SRH Hotel Master Lease”) whereby the Lessor agrees to lease the Premises (as defined in the SRH Hotel Master Lease) to the Lessee to be operated as a hotel subject to the terms and conditions as stipulated in the SRH Hotel Master Lease. The Commencing Date of the Lease was 8 July 2010 and the period of the Lease will end by July 2020.
2. VARIATION TO THE SRH HOTEL MASTER LEASE
Pursuant to the First Supplemental Agreement, the Parties agreed to vary the SRH Hotel Master Lease to exclude a multi-storey annex building from the SRH Hotel Master Lease subject to the terms and conditions as stipulated in the First Supplemental Agreement to the SRH Hotel Master Lease (“First Supplemental Agreement”).
3. INFORMATION ON SUNWAY, SUNCITY, SRHSB, THE MANAGER, THE TRUSTEE AND SUNREIT
3.1 Sunway
Sunway is a company incorporated in Malaysia and having its registered office at Level 16, Menara Sunway, Jalan Lagoon Timur, Bandar Sunway, 47500 Subang Jaya, Selangor Darul Ehsan. The authorised and paid-up share capital of Sunway are RM10,000,000,000/- and RM1,724,033,519 respectively. The principal activities of Sunway are investment holding and provision of management services.
3.2 SunCity
SunCity, a wholly-owned subsidiary of Sunway, is a company incorporated in Malaysia and having its registered office at Level 16, Menara Sunway, Jalan Lagoon Timur, Bandar Sunway, 47500 Subang Jaya, Selangor Darul Ehsan. The authorised and paid-up share capital of SunCity are RM3,500,000,000/- and RM251,384.14 respectively. The principal activity of SunCity is investment holding.
3.3 SRHSB
SRHSB, a wholly-owned subsidiary of SunCity which in turn is a wholly-owned subsidiary of Sunway, is a company incorporated in Malaysia and having its registered office at Level 16, Menara Sunway, Jalan Lagoon Timur, Bandar Sunway, 47500 Subang Jaya, Selangor Darul Ehsan. The authorised and paid-up share capital of SRHSB are RM25,000,000/- and RM20,000,000/- respectively. The principal activities of SRHSB are those of a hotelier.
3.4 The Manager
The Manager, a subsidiary of Sunway, is a company incorporated in Malaysia and having its registered office at Level 16, Menara Sunway, Jalan Lagoon Timur, Bandar Sunway, 47500 Subang Jaya, Selangor Darul Ehsan. The authorised and paid-up share capital of the Manager are RM1,000,000/- respectively. The principal activity of the Manager is managing and administering a real estate investment fund.
3.5 The Trustee
The Trustee is a company incorporated in Malaysia and having its registered office at Level 10, Tower One, RHB Centre, Jalan Tun Razak, 50400 Kuala Lumpur. It is registered as a trust company under the Trust Companies Act, 1949.
The principal activity of the Trustee is providing professional retail and corporate trustee services.
The present authorised share capital of the Trustee is RM25,000,000 comprising 2,500,000 ordinary shares of RM10.00 each, of which 1,200,000 are currently issued and credited as partially paid-up of RM5.00 each in the Trustee.
3.6 SUNREIT
SUNREIT was established pursuant to a Deed dated 20 May 2010 (as supplemented by a Supplemental Deed dated 10 June 2010) entered into between the Manager and the Trustee. The principal investment policy of SUNREIT is to invest in commercial, office, industrial and other real estate assets.
4. RATIONALE
The new multi-storey annex building within the Premises which comprises 2 levels of restaurant and 1 level of ballroom shall be tenanted by reputable food & beverage operators under 3-year tenancies with an option to renew for a further 2 terms of 3 years. In view of the straight forward nature of the tenancies which are similar to retail or office properties, this annex building is accordingly excluded from the SRH Hotel Master Lease. The new multi-storey annex building is currently under construction and is expected to be completed by October 2014.
5. EFFECTS OF THE FIRST SUPPLEMENTAL AGREEMENT
5.1 On Unit Capital and Substantial Unitholders’ Unitholding
The First Supplemental Agreement will not have any effect on the total units issued and substantial unitholders’ unitholding as this agreement does not involve any allotment or issuance of new units by SUNREIT.
5.2 On Net Asset Value (“NAV”)
The First Supplemental Agreement will have no material impact or changes to the unaudited NAV of SUNREIT at the time of completion.
5.3 On Earnings
The First Supplemental Agreement is not expected to have any material effect on the earnings of SUNREIT for the financial year ending 30 June 2015.
6. APPROVALS REQUIRED
Pursuant to the Securities Commission’s Guidelines on Real Estate Investment Trusts, the First Supplemental Agreement does not require approvals from the Securities Commission or the unitholders of SUNREIT.
7. DIRECTORS' AND MAJOR UNITHOLDERS' INTERESTS
Tan Sri Dato' Seri Dr Jeffrey Cheah Fook Ling and Sarena Cheah Yean Tih are Directors of Sunway Berhad (“Sunway”) and the Company. Dato’ Ngeow Voon Yean is a Director of the Company as well as the Lessee. He also has direct interest in Sunway and deemed interest in SUNREIT.
Tan Sri Dato’ Seri Dr Jeffrey Cheah Fook Ling, Puan Sri Datin Seri (Dr) Susan Cheah Seok Cheng, Sarena Cheah Yean Tih, Evan Cheah Yean Shin, Sungei Way Corporation Sdn Bhd and Active Equity Sdn Bhd are major shareholders of Sunway and major unitholders of SUNREIT.
Accordingly, Tan Sri Dato' Seri Dr Jeffrey Cheah Fook Ling, Dato’ Ngeow Voon Yean and Sarena Cheah Yean Tih have abstained from deliberation and voting in the Board of the Manager in respect of the First Supplemental Agreement.
Save as disclosed above, none of the other directors of the Manager or major unitholders of SUNREIT or persons connected with them has any interest, direct or indirect, in the Letter of Variation.
8. THE MANAGER’S AUDIT COMMITTEE’S RECOMMENDATION
The Audit Committee of the Manager, after having considered all aspects of the First Supplemental Agreement, is of the opinion that the First Supplemental Agreement is in the best interests of SUNREIT and is not detrimental to the interests of the non-interested unitholders of SUNREIT. The Audit Committee of the Manager is of the view that the First Supplemental Agreement is fair, reasonable and on normal commercial terms.
9. STATEMENT BY THE BOARD OF DIRECTORS
Save and except for Tan Sri Dato' Seri Dr Jeffrey Cheah Fook Ling, Dato’ Ngeow Voon Yean and Sarena Cheah Yean Tih, the Board of Directors of the Manager is of the opinion that the terms of the First Supplemental Agreement is in the best interests of SUNREIT.
10. DOCUMENT AVAILABLE FOR INSPECTION
The First Supplemental Agreement is available for inspection by unitholders of SUNREIT at the registered office of the Manager at Level 16, Menara Sunway, Jalan Lagoon Timur, Bandar Sunway, 47500 Subang Jaya, Selangor Darul Ehsan during normal business hours (9.00 a.m. to 6.00 p.m.) from Monday to Friday (except public holidays) for a period of 3 months from the date of this announcement.
This announcement is dated 17 September 2014.
