Shares & Derivatives
First REIT’s Sponsor Plan to Default on Original Rental Support Agreements- Price Collapsed By 30% Within A Day
By Investment Income for Life  •  June 1, 2020
What a shocking announcement being made by First REIT this afternoon. Lippo Karawaci plans to default on the rental income support for Siloam hospitals stipulated in the rental agreements. The sponsor has cleverly crafted it as a "rental restructuring" instead of a planned default. First REIT share price dropped from S$0.885 to an all day low of S$0.635 this afternoon- a whopping 28% crash in valuation. Even before the announcement, I was puzzled to see the price suddenly corrected by over 12% in the morning. Looks like some insiders managed to get the news first and escaped by dumping their stocks. SGX regulatory team immediately raised query on the abnormality. First REIT management team had no choice but to call for a trading halt immediately. Then a few hours later, news came out that the sponsor is unable to provide the huge rental income support. According to First REIT, its sponsor, Lippo Karawaci, had not approached it with regard to the "lease restructuring"....
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By Investment Income for Life
I am an Accountant by training and is currently working in a global MNC in the Supply Chain industry. During my free time, I enjoy reading up on topics such as stock investing, insurance planning and property investment. Since 2012, I have started penning down my thoughts on certain financial matters while striving to achieve financial independence.
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