Aseana Properties wants to keep going – At an extraordinary general meeting held on 22 June 2015, shareholders voted in favour of Aseana Properties’ Board’s proposals to amend the investment policy to enable a realisation of the ssets in a controlled, orderly and timely manner.
As part of that vote, the company committed to dispose of all its assets by June 2018 and to propose an ordinary resolution for it to cease trading as presently constituted (a”Discontinuation Resolution”) at its 2018 AGM. Whilst discussions continue to be held on the sale of most of the remaining assets, the Directors do not expect that these discussions will be successfully concluded by June 2018. The company therefore announced on 24 November 2017 that the directors would consult with shareholders to establish whether alternative proposals to the discontinuation resolution should also be put forward at the next AGM, in the interests of maximising value for shareholders.
Aseana Properties is obliged to put forward a Discontinuation Resolution at its 2018 AGM but its Board firmly believes that ceasing to trade and placing the company in liquidation at this time, which is what would happen if the Discontinuation Realisation is passed, would have a significant adverse impact upon shareholder value, which could include:
- the triggering of an Event of Default under the lending covenants of some of the facility agreements, requiring immediate repayment of loans;
- depressed asset prices for all future asset sales;
- reclassification of accounts on a “break-up basis”; and
- operational disruption of the operating assets.
The company therefore intends to consult with key shareholders to collect their views on the alternative proposals to the discontinuation resolutions, which may include:
- shareholders rejecting the Discontinuation Resolution and for the Company to continue in its current manner for a further two years until the 2020 annual general meeting, where by an ordinary resolution for the Company to cease trading will be put forward;
- the company continuing the current realisation policy of continuous asset disposals at prices at or close to their realisable NAV;
- the company using the asset’s disposal proceeds to repay all outstanding project debts, with a target to pay back all loans by Q2 2019, and thereafter use disposal proceeds to make capital distributions to shareholders;
- the Development Management Agreement with Ireka Development Management Sdn Bhd (“IDM”) to be renegotiated; and
- further cost reductions in the company’s cost base as the gross assets decline, including a decrease in the size of the Board with effect from the 2018 AGM.
Further announcements will be made summarising the feedback from the shareholder meeting and to detail any alternative proposals that will be presented to shareholders at the 2018 AGM.
ASPL : Aseana Properties wants to keep going