First REIT is restructuring and the management has been proactively persuading shareholders to accept the restructuring. First REIT has consolidated all the important information in this PowerPoint proposal which I will be relying on.

Post Renewal of Master Lease and Rights

The Reit has proposed for a rights exercise at $0.20 per share. In addition, the new master lease has the following terms (page 7 of the slides):

What stands out is how the new terms for rental is an “either/or” option for its base and variable rent; unlike the previous arrangement which was an addition of the two. Furthermore, the base rent has been drastically reduced and my sensing is that the 8.0% of preceding financial year revenue is the higher of the two.

The new terms will take effect in FY 21 if it is voted through. This means the lessee will be basing its

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