Dasin Retail Trust Expands Second Half Net Loss to $221.5 Million; Sias Inquiries Continue

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SINGAPORE – Darsin Retail Trust (DRT) posted a net loss of $221.5 million in the second half of December 2022, up from $51.8 million in the same period last year, according to a statement prepared on a going concern basis Became.

The latest results show a loss per unit (LPU) of 27.3 cents compared to 6.61 cents last year.

LPU for fiscal 2022 was 34.55 cents, compared to 6.26 cents last year.

Half-year revenue fell 24.7% to $37.6 million from $50 million in the second half of fiscal 2021. The top-line decline was driven by lower contributions from all malls in the trust portfolio, which consists of seven retail malls with direct exposure. To Guangdong, Hong Kong and Macau Greater Bay Area.

Net real estate income (NPI) decreased 33.6% to $20.6 million from $31 million a year ago. The trust has defaulted on loans worth about $910 million and no dividends have been announced for the same period.

After the results were released, the Securities Investors Association (Singapore), or Sheas, a minority investor advocacy group, sent questions to the DRT about investors’ concerns about the results.

On loan defaults, Sias asked the trusts to describe the hurdles they face in disposing of some of their assets to deleverage and address defaults. It also asked the administrators of the trustees to provide local updates on the operational status of DRT’s seven malls in Guangzhou.

Sias said the changes in the fair value of DRT’s investment properties violated the gearing, interest rate coverage and loan-to-valuation ratios currently required by the offshore facility.

We asked the trust to elaborate on how this will affect the refinancing of both offshore and onshore facilities, and on progress made in this area.

DRT’s full-year sales fell 15.8% to $85.3 million from $101.3 million in fiscal 2021.

NPI for fiscal year 2022 was $47.2 million, down 31.8% from $69.2 million in the previous year.

The 2022 NPI margin is 55.2%, down 13.1 percentage points from the previous 68.3%. The trustee-manager said this was mainly due to loss reserves on receivables, excluding which the margin would have been 75.6%.

In its outlook, DRT’s trustee and manager has made significant contributions to the trust’s ability to remit funds outside of China over the next 12 years for interest payments on its two offshore facilities and mandatory offshore operating expenses. acknowledged that there are significant uncertainties. A few months.

Should the trust cease to continue as a trust, it could affect the classification of its assets and liabilities, as well as its ability to realize assets at their recognized values ​​and extinguish liabilities at the amounts shown in the financial statements. warned. Continuing concern.

At the end of 2022, DRT’s total debt at the group level was $1.3 billion, compared with $1.4 billion in the same period last year.

In addition to questions about the latest results, Sias asked the DRT for updates on the proposed sale of Shiqi Metro Mall and Xiaolan Metro Mall, as well as other assets.

It also asked the trust to clearly define the roles and responsibilities of its management team, including trustee and manager CEO Wang Qiu and chief financial officer Steven Ng.

This content describes the level of involvement of the Board of Directors in the trust’s operational and strategic matters, and how the trustee-administrator has been in handling the trust’s matters, particularly in relation to the liquidation petition against Sino Ocean Capital in Hong Kong. questioned the trust as to its competence. .

Earlier this month, the DRT announced that talks with a “reputable Chinese company” over a memorandum of understanding (MOU) had broken down. This memorandum related to the restructuring of the trust’s loan maturity.

Sias asked the DRT to outline all options being considered for restructuring, including details of who would lead the negotiations, assets involved and counterparties.

The group also noted that some investors have expressed concerns about the potential illegality of the transactions described in the memorandum. As such, it asked DRT’s board and management to clarify the transaction in question and the laws it may violate.

The DRT unit closed 1.6% lower at $0.12 on Monday.business hours

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