The Monetary Authority of Singapore (MAS) and the Singapore Exchange (SGX) are looking into possible breaches of laws and regulations by Eagle Hospitality Trust (EHT).
The trust has been in the spotlight recently after its REIT component defaulted on a USD341 million loan.
The loan default followed the failure of Urban Commons LLC, the master lessee of EHT’s properties, to make timely rental payments since December 2019, and place the full sum of security deposits due under the master lease agreements.
And as a result of the default, the REIT was restricted by the terms of its loan agreement from making payment of declared dividends to its unitholders.
In relation to this, trading of EHT units was voluntarily suspended on 24 March.
Given these developments, the MAS and Singapore Exchange Regulation (SGX RegCo) have directed the manager of EHT to take steps and protect the rights and interests of its unitholders.
These include obtaining the approval of its trustee before making any payments or transfers of the REIT’s funds.
MAS has also directed the manager of the REIT to restore its minimum base capital, and financial resources to comply with MAS’ requirements.
This is a requirement that EHT has been in breach of since December 2019.
Additionally, SGX RegCo has queried the manager of EHT on the circumstances resulting in the voluntary suspension of its units.
The regulator has also directed the manager to make its response public.
This will be the second time in a month that EHT has been queried by the SGX.
On 6 April, EHT and its trustee, DBS Trustee Limited received queries pertaining to security deposits and letters of credits.
EHT’s most recent woes began following the collapse in demand for its hotel rooms amid the COVID-19 outbreak.
Previously, it was also in the spotlight over the status of its ocean liner-turned-hotel property, The Queen Mary.
The property is said to be in need of substantial repairs and refurbishment works.
As a result of these issues, EHT has fallen significantly from its initial public offering (IPO) price.
It was listed on the Singapore Exchange (SGX) at USD0.78 in May 2019, and was last traded at USD0.13 in March 2020 before it was suspended.