Aberdeen Standard Investments and ten other institutional investors of Emirates Reit have collectively claimed support of a majority of certificate holders to prevent the real estate investment trust's bid to exchange a $400m sukuk for new securities, according to report by the Khaleej Times on 3 June.
The UAE's largest Shariah-compliant real estate investment trust, which has reportedly suffered $243m in face-value losses on rental assets, has offered to exchange the unsecured sukuk securities due in 2022 for new secured notes maturing in 2024.
Investors opposing the move formed an ad-hoc group, including Aberdeen Standard Investments, GFH Financial Group, Sancta Capital, Shuaa Capital and Oasis Management, to lead the talks with Emirates Reit but failed to bring the trust management to the negotiation table.
The ad-hoc group calls again on Emirates Reit to provide the latest voting data to validate its counterclaim that it has a majority."
The dissenting investors reiterated their call for more clarification from Equitativa, manager of Emirates Reit, on its claim that "close to 60 per cent of the sukuk holders had cast their vote as of May 26, with more than 75 per cent of those votes in favour of the Consent Solicitation Memorandum".
Speaking to Khaleej Times on 2 June, the group members said the voting data provided by Emirates Reit continues to show that investors representing the majority of certificates outstanding (55%) oppose or did not vote for the consent solicitation as at May 26. Certificate holders representing only 45% of Certificates outstanding have, according to the data provided, voted in favour.
"The ad-hoc group calls again on Emirates Reit to provide the latest voting data to validate its counterclaim that it has a majority, in the interests of full transparency and to avoid the potential spread of misinformation," it said.
Members of the group said collectively they and such other investors together represent 40% of certificates outstanding who oppose the Consent Solicitation. The rapidly growing size of certificate holders opposing the consent solicitation demonstrates the serious concerns that certificate holders have, particularly in respect to weak governance and cash leakages.
Citing cash leakages via excessive management fees and operating costs as one of the reason for the Reit's poor performance, the group warned that if the maturing date is pushed out for another three-and-a-half-years, sukuk holders will potentially be losing another $40 or $50m of value in incremental management fees between now and 2024.