SINGAPORE (July 1): ARA Trust Management, the manager of Suntec REIT says that Suntec REIT’s wholly-owned subsidiary, Suntec Harmony, has subscribed for new ordinary shares in Harmony Investors Group (HIGL) for a subscription amount of $40 million.
The transaction was made directly and indirectly through Harmony Partners Investments Limited (HPIL).
HIGL indirectly holds Suntec International Convention and Exhibition Centre (Suntec Singapore).
Following the subscription, Suntec REIT’s share in HPIL increased to approximately 57.9% and its effective interest in HIGL increased to approximately 66.3%.
Prior to the subscription, Suntec Harmony held 20.0% of HIGL and 51.0% of HPIL. HPIL in turn, held 80% of HIGL. Accordingly, Suntec REIT had a 60.8% interest in HIGL.
According to the REIT’s manager, the purpose of the capital injection is to support Suntec Singapore in the face of challenges arising from the Covid-19 pandemic.
To fund the business needs of Suntec Singapore, HIGL issued an equity call notice to its shareholders, Suntec Harmony and HPIL. HPIL in turn, issued a notice to its own shareholders, including Suntec Harmony.
The convention centre has been temporarily closed till Aug 2 to reduce operating costs, for now.
Suntec REIT predicts that the recovery will be slow in 2020, led by smaller-scale events, meetings and consumer shows when current measures on safe distancing are eased. International conventions and events will also remain weak.
Units in Suntec REIT closed 2 cents higher, or 1.4% up, at $1.43 on Wednesday, prior to the announcement.
