Forterra Trust (formerly: Treasury China Trust)

[Boon]

Boon, it seems that you missed the point.

It is not that the liquidator will go after the asset of TCT. There is hardly any way for the liquidator to do it.

It is about the convertible bonds having conditions about who ultimately owns THRE and the property management company. The reason of the sale to Richard Barrett is to prevent earlier redemption of the convertible bond.

plus, the liquidator can also go after the transaction of sale of TCT units by the TH subsidiaries to Richard Barrett and John Ronan. So there is possibility that TCT units may be forced sale in the market to repay TH's debt.

Hi Freedom

Thanks for your concern.

I am fully aware of the bond issues. The amount involved is about SGD 70 million. I do not view the early redemption of the bonds as being a minus. On the contrary, I view it as a plus - if TCT has to divest (not fired-sales) BLP and/or Central Plaza to pay for the bond redemption – doing some divestment at this stage is not a bad thing – it would be even better if some of the sales proceed could be distributed to unit holders.

On your last point, assume that “forced- sale” does happen. Again, I see more plus than minus in this - if the controlling interests in TCT of both RB and JR combined could be reduced below 25% - the less the better.

If TCT has to divest, why do you think any potential buyer would pay a fair price knowing that TCT is in need of money? Plus, the book value of those properties already on the high side. It may not be a fire sale, but it is difficult for TCT to obtain a fair value.

force sale of TCT units will drive price very low given its very low liquidity. not good for existing unit holders.

The brokers for the sale of Central Plaza and BLP are JLL and CBRE respectively. The sales have been conducted by sealed bids.

As to what price could Central Plaza and BLP be eventually sold for, it remains to be seen. One’s projection really depends on how well one understands the China/Shanghai property market. My guess is - it will be within the range of plus and minus 10% of book value.

If TCT units of Barrett and Ronan were to be force sold, I guess it would be through married-deals. There will always be Private Equity real estate funds eyeing for it, if there are profits to be made.