SINGAPORE (THE BUSINESS TIMES) - Eagle Hospitality Trust (EHT) has served "pay/perform or quit" statutory notices to its master lessees in US states which have those requirements.
It means each master lessee is being made to pay the outstanding rent and/or perform the defaulted non-rent obligations within a deadline of between three and 15 days, according to the applicable state law.
Otherwise, it will have to "peacefully vacate" and surrender the property, according to EHT's bourse filing on Wednesday night.
Since early this year, some master lessees have not paid rent to EHT under the master lease agreements (MLAs) for certain EHT properties. It resulted in an event of default for a US$341 million (S$464 million) loan that EHT had taken out, which subsequently forced the trust to delay a distribution to its stapled security holders.
EHT's sponsor, Urban Commons (UC), later in August alleged that EHT units were in breach of master lease agreements in which UC entities are master lessees.
The allegations include EHT's failure to pay over US$15.3 million in relation to certain contracts, obligations and assets; they also charged that EHT had failed to maintain hotels, to refund rents for a hotel that sustained hurricane damage, and had used security deposits wrongfully.
EHT on Aug 27 rejected those allegations in a letter, calling them baseless.