The operator of Emirates REIT says it has a sizable number of bondholders favoring its proposition to expand the maturity period of its $400 million Sukuk from 2017. On Thursday, Equitativa, the fund manager, said 75% of the individuals who cast early votes on the proposition agreed with the move.
But the ‘Ad Hoc Group’ – including bondholders who went against the maturity period extension – question this conflict. “The existing Ad-Hoc Group represents over 30 percent of large Sukuk holders and clearly represents the majority who are against the transaction and consider that the deal should be enhanced,” it said in an articulation.
On Equitativa’s contention, the Group said: “The company announced that 60 percent of the certificate-holders cast their vote before the early document review fee deadline, with 75 percent of those votes in favor of the consent solicitation.
“The conclusion is that the majority of Certificate-holders representing 55 percent remain opposed or have not voted, demonstrating the overwhelming concerns that certificate-holders have with the proposal presented. With that backdrop, the early vote results appear far from encouraging and validate the Ad-Hoc Group’s view that the majority of the certificate-holders remain unsupportive of the proposal as of the early participation deadline.”
Equitativa had set May 26 evening as the deadline for the early entries. June 7 is the last date.
What bondholders want
The Ad Hoc Group investors vehemently oppose the new Sukuk certificate plans. In the statement issued Thursday, they call for…
* Transparency on (i) the operational, financial, and liquidity position of the company; (ii) All ongoing breaches to transaction documents; (iii) ongoing litigation; (iv) regulatory investigations; and (v) related party transactions.
* Cessation of cash leakages via excessive management fees, operating costs, and CAPEX.
* Rectification of legacy governance issues at the company.
* Adequate downside protection for the certificate-holders, particularly in respect to security.
* Adequate economics for the material risks that the certificate-holders bear.