Lippo Malls units tumble after it cancels March distribution for its $140m perpetual securities
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LMIRT units fell sharply and were trading down 0.4 cent, or 18 per cent, at 1.8 cents as at 2.23pm on March 21.
PHOTO: LIPPO KARAWACI
Janice Lim
SINGAPORE – The manager of Lippo Malls Indonesia Retail Trust (LMIRT) has elected not to pay distributions, originally scheduled on March 27, to holders of its $140 million perpetual securities issued in September 2016.
Following the news, LMIRT units fell sharply and were trading down 0.4 cent, or 18 per cent, at 1.8 cents as at 2.23pm on Tuesday.
The manager of the real estate investment trust said in a bourse filing on Monday evening that the issuer has no obligation to pay the March 2023 distribution and the unpaid sum is non-cumulative and does not accrue distribution.
Unit holders of LMIRT, as well as those who bought its June 2017 perpetual securities worth $120 million, are also at risk of not receiving any payments from the issuer.
LMIRT’s manager said that it will apply the dividend stopper provision arising out of its discretion in stopping the March 2023 distribution of its 2016 perpetual securities, and not declare or pay any dividends or distribution on its units or the 2017 perpetual securities.
The issuer will also not redeem, reduce, cancel, buy back or acquire any units or any of the 2017 perpetual securities.
The announcement by LMIRT comes after two rating agencies, Moody’s and Fitch, downgraded its ratings for the issuer, citing its refinancing risk. THE BUSINESS TIMES
