Wednesday 9 December 2020

Eagle Hospitality Trust New White Knight- SC Capital and EOGM Showdown Coming

The recent announcement of SC Global coming into the picture as White Knight is good news for Eagle Hospitality Trust ("EHT"). SC currently controls the managers of two listed real estate investment trusts in the region, Japan Hotel REIT Investment Corporation and Thailand Prime Property Freehold and Leasehold REIT. It is very strong financially and has the networking and experiences to restructure EHT.

The bad news now is how much will be the placement units issued to SC Global for them to re-capitalise EHT and at what price. Current unit holders will suffer from massive dilution in their original holdings if the new unit issuance is based on recent valuation report of the hotels. But no choice, given that SC Global need to have a significant stakes in order to water down the current units controlled by Howard Wu and Taylor Woods.

More details should be released soon on the re-capitalization plan and the Extraordinary General Meeting to be convened to formally approve the change in REIT Manager and acceptance of the rescue package. Perhaps the other interesting question is whether current unit holders need to also cough up additional funds in order to raise working capital. 

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LATEST updates on 10 Dec 2020: Please refer here for the key highlights on the detailed rescue plan and EGM.

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