Sime Darby launches reverse takeover of Saizen REIT

Officials familiar with the deal said that the management might not be keen to issue the perpetual debt paper if there was any downgrade on Sime Darby

KUALA LUMPUR: Sime Darby Bhd plans to develop a real estate investment trust (REIT) to generate resilient and recurring income stream, starting with the reverse takeover of Saizen REIT.

The conglomerate said on Monday the REIT platform is expected to have greater flexibility in its future fund-raising exercises to build a sizeable international portfolio of assets, which Sime Darby will benefit from its direct stake in Saizen REIT.

Sime Darby said its indirect units Hastings Deering (Australia) Ltd and Sime Darby Property Singapore Ltd (SDPSL) had signed a framework agreement with Japan Residential Assets Manager Ltd (JRAM), the manager of Saizen REIT, for the properties disposal.

Under the agreement, Hastings Deering would sell some of its industrial properties in Australia to Saizen REIT in return for new units in Saizen REIT as part of the reverse takeover of Saizen REIT by SDPSL.

This would also hinge on the completion of the distribution of up to 9.87 Singapore cents (29.42 sen) per unit to the unitholders prior to the issuance of the new Saizen REIT units a

Sime Darby said the consideration for the JRAM acquisition would be 80% of the net assets (NA) of JRAM and US$1mil.

“In addition, the proposals would enable Sime Darby to monetise the properties, on which Hastings Deering will continue its operations under the master lease, while de-leveraging its balance sheet. This will further allow Sime Darby to re-allocate capital and drive continuous improvements in financial and operational efficiency,” it said.