Dasin Retail Trust On The Verge Of Bankruptcy Declaration? Will It Be Suspended From Trading on SGX?

This is a follow up on my previous post on Dasin Retail Trust ("Dasin") on 18th September 2021 with regard to its debt crisis of S$500Mil since the syndicated bankers were willing to only grant a short term extension of 5 months from July 2021. The day of reckoning for Dasin approaches this week with the bank loan officially being in default on 19th December 2021 if it is unable to secure support from the syndicated bankers. Up till today, there is still no news being released by Dasin's new Trust Manager, Sino Ocean on SGX. Dasin's senior management has been silent since the last announcement made to the public on 7th November 2021 on the change in new Trust Manager. Unit prices for Dasin also dropped sharply and is now near its all time low at S$0.375 per unit in stark contrast to S$0.785 per unit during its peak this year. The silence for so many weeks in the face of imminent loan default is deafening. Are we witnessing the calm before the storm?

1. Taking calculated risk

I am still holding on to my small stake in Dasin Retail Trust as my investment thesis is that since the new Trust Manager, Sino Ocean which took over is a listed company on the Hong Kong Stock Exchange and well-known, the bankers will be willing to grant a long term extension of the due bank loan instead of rolling into a default and proceeding with creditor winding up process. Forced sales of investment properties is not going to be good for all stakeholders. Its current dividend yield is close to +14.2% based on its last unit price of S$0.375 per unit as at 14 December 2021.

2. Liquidation stress testing of realisable assets to repay bank loans and Unitholders

I have written in to the Customer Relation Officer on their website but till now have not received any reply on the status of its bank loan negotiation. In the worst case scenario, we have to assume that the fair value of the investment properties in Dasin's books have been severely inflated. If distressed selling price is at a discount of <-47.3%> of its last disclosed numbers, then this will mean a total loss for current investors-pls see below screenshot for illustrative simulation model. Not impossible given the case of Eagle Hospitality Trust. Also, given that China property debt crisis from Evergrande- if not managed well- may lead to a case of economic meltdown in the entire China market across all sectors. However, I am keeping my fingers crossed that the discounted selling price is at most only 40% off the last valuation in order to recoup back some of the investment costs. 

Parting thoughts

I have no idea how my tiny foray into Dasin will turn out. My investment thesis may turn out to be totally wrong. If so, this will be the 2nd SGX listed Trust (within this 2 years) that collapsed with investors losing all of their investments. The only good thing about Dasin is that the results will be known quickly by next Monday (20th Dec 2021) latest. It will either increase by maybe 50% from good news on renewal of bank loan or be suspended indefinitely due to default of bank loan when the announcement is released.

Please also see my previous posts on Dasin:

1. Will Dasin Retail Trust Go Bankrupt And Be Put On Fire Sales? Annualised Distribution Yield at 12.9% - 18 September 2021

2. Dasin Retail Trust Bounced Back To Life with 22% Valuation Improvement- Will It Survive the Debt Crisis With Sino-Ocean Capital Taking Over As New Trust Manager?- 13 October 2021