EHT unitholders reject SC Capital as new manager

The sponsor believes that unitholders were wary of SC’s lack of experience in the US market.

Unitholders of Eagle Hospitality Real Estate Investment Trust (EH-REIT) have rejected SC Capital Partners (SC) as a replacement manager during an extraordinary general meeting (EGM) held via digital webcast.

Urban Commons (UC), the sponsor of EH-REIT, said unitholders wanted additional options, and reiterated that the fund should be allowed to table its devised plans from August 2020. The sponsor has attempted to table multiple plans to demonstrate the best path to save the REIT, but it has been blocked from presenting the plans to unitholders.

“We believe that unitholders recognise SC’s lack of experience in the US market, which is mature, unique and dynamic”, UC principal Howard Wu said.

Wu added that unitholders had witnessed the REIT’s cash reserves being depleted through "unnecessary" restructuring efforts, ever since UC's powers as REIT manager had been restricted.

UC also mentioned that unitholders saw highly uncertain elements at EH-REIT’s EGM that could allow the REIT vehicle to be driven into more hardship.

“In addition, we saw some alarming elements to SC’s proposal that could have caused unnecessary conflict between invested parties at the detriment of unitholder value, and we are pleased that unitholders recognised the same,” Wu said.

UC has urged a designated DBS trustee to take a closer look at its plans.

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