The REIT’s lenders sent a demand letter dated Jan 24 to EC World REIT which states, among others, the first right of mortgage over its properties. The illegal mortgages, amounting to approximately RMB269 million ($50.8 million), were created in connection with funds provided by the Fuyang government to Forchn Holdings and were undertaken without the knowledge or consent of EC World REIT. Forchn’s actions, hence, have breached the terms of the EC World facilities.
The manager of EC World REIT has issued an update regarding the status of the mortgages imposed on its Fuzhou e-commerce, Fuheng warehouse, and Hengde logistics properties.
The REIT’s sponsor, Forchn Holdings, had been given till Jan 20 by EC World REIT to remove the illegal mortgages imposed over its properties, of which the failing to do so could result in legal action.
