Sabana Reit unitholders form committee to oversee manager’s removal and internalisation

Unitholders of Sabana Real Estate Investment Trust (Sabana Reit) have come together to establish the Sabana Growth Internalisation Committee (SGIC) following the approval of the manager’s removal.

This pivotal decision was reached at an extraordinary general meeting (EGM) requisitioned by activist investor Quarz on 7 Aug.

The primary purpose of the SGIC is to lend its support and expertise to ensure the successful and timely completion of the internalisation process within the targeted budget range of SG$3 million to SG$5 million.

Activist investor Quarz has been vocal about its expectations regarding the internalisation process.

It has urged that the preparatory work required for the submission of the internalisation application to the Monetary Authority of Singapore (MAS), such as company incorporation and human resources, should not extend beyond three to four months.

The proposed timeline aims to conclude these essential preliminary steps by December 2023.

In addition, Quarz has strongly advocated for the establishment of a “clear target” that sets a goal for the completion of the internalisation process by Sabana Reit’s annual general meeting scheduled for April 2024.

One of the SGIC’s central objectives is to champion a “best-in-class corporate governance” model.

Upon the successful completion of the internalisation, all unitholders will be afforded the right to vote in, remove, and re-elect directors, ensuring an active and accountable decision-making process.

Besides, the SGIC is poised to play a significant role in engaging with various stakeholders, including the MAS, Sabana’s external manager, and banks, on matters related to the internalisation process.

It will offer guidance, input, and support to the trustee in the development and implementation of the internalisation plan.

Importantly, the SGIC will work diligently to ensure that the new internal manager operates independently and in the best interests of all unitholders.

Quarz has extended an invitation to all Sabana unitholders to join the committee, emphasising the importance of participation. Already, over 50 unitholders have expressed their intention to become part of this collaborative effort.

The committee offers three types of membership to accommodate varying levels of involvement.

Unitholders who wish to actively contribute as committee members may join as “actively involved members.” “Partially involved members” are expected to attend committee meetings periodically.

Additionally, there is a provision for “passive members” who want only to be updated on SGIC activities and participation in key committee events.

Participation in the SGIC is entirely voluntary, driven by the common goal to safeguard investments and work toward enhancing the distribution per unit and unit price of Sabana Reit, as highlighted by Quarz.

Members of the SGIC will maintain their individual voting autonomy, allowing them to exercise their votes independently rather than as part of a shareholder group or concert party.

Quarz emphasised that more than 10,000 Sabana unitholders are eagerly awaiting the timely completion of the internalisation process by HSBC Institutional Trust Services.

With the strong support of the SGIC and its unitholders, Quarz believes that the trustee will successfully navigate the internalisation process efficiently and transparently.