(09-02-2017, 12:33 AM)ACTIVIST SPEAKS Wrote: [ -> ]tonylim, I will answer you point by point:
1 and 2. For Colliers, Savills and Knight Frank to separately and independently come to a valuation of exactly $23m for a property is too much of a coincidence unless they are using exactly the same inputs provided. We merely stated a fact that this property sits in Vibrant Group’s book at only $9.9m. I did not compare historical cost with the current price and say one is cheap and other is expensive. And I know the various way a property can be recorded in the books when I was studying 1st year accountancy in NUS. I am not the only one challenging this. Mdm Ho Chin, in her speech in 2005, highlighted the perils of a Manager buying an assets at inflated prices and the vendor agreeing to lease back the same property at inflated rents well above market rates. She said the REIT’s investment hurdles are technically met and both the Manager and the vendor can claim to be “winners” in the deal. “The losers are the unitholders” she added. All purchases and disposal must be supported by a valuation report. I never say that there is none.
3. The Manager is correct that we have not assembled a team to take over. When MAS allows 50 minority unitholders to convene a meeting to remove the manager, we think MAS had not intended for us to look for an alternative manager. Logic will tell you that there is no way MAS will allow a group of unlicensed motley crew decides the fate of a $800m REIT owned by more than 30,000 unitholders. MAS has just confirmed today that the Trustee has the power to appoint the next Manager (see, you can wrong). We think the Manager is wrong to insist that we have a replacement manager. In any case, how can we (66 strangers) assemble a team of more than 100 people as standby to take over in case the Manager is successfully removed.
4. The Manager is correct to point out removing the Manager may be an event of default under the terms of the outstanding loan facilities. WE BELIEVE this is an issue that the new Manager can solve. The Manager does not own the properties pledged. The REIT’s aggregate leverage ratio is less than 45%. WE BELIEVE this scare tactic is merely a strategy used to entrench them firmly in their appointment as the Manager of Sabana REIT. I have never accused them of lying and in fact, I agree with them on the default convenants. And I do not know how you can come to your conclusion that I accuse them of lying.
5. We think they are overpaid. And for that, you want us to report to the police??? You can disagree with what we are doing but you cannot put words into our mouth. Even Sabana did not but for some reason, you constantly attack us in a very degrading way.
P.S. I delete those postings and most of them are reproduced here anyway. Sorry, did not know about this ethics
My 2 cents worth.
I think all this back and forth arguments are completely missing the point. They are all irrelevant. Why do I say that? Let's establish the facts.
The manager works (in theory) for the benefit of the unitholders. Agree?
The unitholders wants 1) high DPU 2) Rising share price. Agree?
So the key question is:
Has the manager achieved this? The facts say "hell, no!".
Nobody can disagree with the above statements. They are facts, right?
Going into detail to break down the logic of each step is missing the forest for the tree.
To give an analogy, if you work in sales, and you fail to satisfy the goals set by your boss, can you tell your boss:
1) No sales because previously we got 3 big clients. They failed to renew contract and now I gotta find many smaller clients, which I am unable to do so. Not my fault.
2) I am not overpaid. Because all my peers in this line gets paid the salary as me. I even convert 80% of my salary to the company's shares under employee share option scheme. My interests are vested with the company!
Does it matter? The boss wants the sales. You failed while your peers in other companies (other REITs) have done much better.
The only problem here is that the unitholders are unable to give an alternative solution. In all the successful activists campaigns I've studied, there's always a team. Relying on some miracle to assemble the team is not going to cut it with the other unitholders.
I too, think the loan covenants thing is just scare tactics.
A strong team can easily renegotiate. Nothing has changed fundamentally with the removal of the team.
In fact, one can argue that with the removal of the underperforming team, the lenders should be even happier to relax the loan covenants since now they are less likely to default!
So in summary to Activist, you really need a team. An alternative solution. I don't even think they need to have strong credentials.
It doesn't take much to outperform expectations at this juncture right?
And if anything, in terms of career prospects, this should be a golden opportunity for those who are qualified and have the knowhow and experience. Think about it:
there's no downside.
If you fail, well the previous team already screwed it up beyond salvaging. Everyone knows that. It's plastered in the news.
If it flatlines, well, you are a steady hand and you kept it afloat against all odds.
If it succeeds, you are hailed as a Steve Jobs like genius, coming in, clearing the deadwood.