SIAS – First REIT Virtual Dialogue Session was conducted on 7th Jan 5pm.

You can view the recording here and Q&A here.

Key Highlight

3 main issues:

  • First Reit foresee that Lippo Karawaci (LK) will defaultas LK have been in negative cashflow since 2015 [LK contribute 72.1% of rental income]
  • Unable to refinance as Bank are not lending due to concerns over LK (Deal breaker)
  • Soon to expire of 5 Master lease by end 2021

The board had looked through all options such as divestment of asset and concluded that rights is the best options due to the short timeline.

Legal procedure option will be lengthy (Time), Costly and Complicated.

Divestment option will not be ideal as bid price received will not be attractive due to COVID.

New operator option is not ideal as existing infrastructure might not suit new operator

Rights is urgently needed, else LK will have a vey high chance of default.