NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2025 2 BASIS OF PREPARATION (CONT’D) 2.3 Use of going concern assumption (cont’d) In the previous financial year ended 31 December 2024, the Group completed the sale of its property i.e., Capitol (Note 6) and the net sale proceeds of US$109.5 million, as well as existing cash of US$21.2 million, were used to repay US$130.7 million of loans and borrowings (Note 9) maturing in 2024. As the 2024 Net Proceeds Target had not been achieved, the Group incurred and paid a fee of US$2.3 million (Note 18) to the lenders under the MRA. During the current financial year, the Group completed the sale of two additional properties, i.e. Plaza in February 2025 and Peachtree in May 2025. The sale of Plaza and Peachtree generated net sale proceeds of US$163.6 million, which the Group utilised to repay US$40.0 million of loans in March 2025 and US$121.0 million of loans in June 2025 following each divestment. In addition, the Manager obtained the consent of the lenders to extend the Disposal Deadline from 30 June 2025 to 31 December 2025 which would coincide with the expiry of the Previous Disposition Mandate, as well as the approval for an additional repayment of US$25.0 million of loans due between 2026 and 2028 using its existing cash. This additional repayment was completed on 2 July 2025. Pursuant to the growth and value up plan set out in the circular to Unitholders dated 1 December 2025 (the “Growth and Value Up Plan”) and the extraordinary general meeting held on 16 December 2025, Unitholders approved a disposition mandate to authorise the disposal of up to three existing properties to raise aggregate net proceeds not exceeding US$350.0 million (the “Disposition Mandate”)1 and an acquisition mandate to authorise acquisitions and investments with aggregate agreed property value not exceeding US$600.0 million within the broadened investment mandate (the “Acquisition Mandate”). On 23 December 2025, the Manager and lenders executed the relevant document to effect the MRA Concessions. The MRA Concessions granted are as follows: (i) an extension of the Disposal Deadline from 31 December 2025 to 30 June 2026 (the “Updated Disposal Deadline”); and (ii) an extension of the temporary relaxation of the financial covenants as follows: (a) the Unencumbered Gearing, which is the percentage of consolidated total unencumbered debt to consolidated total unencumbered assets, being not more than 80% (compared to 60%) from 31 December 2025 to 30 June 2026; and (b) the Bank ICR, which is the ratio of consolidated earnings before interest, taxes, depreciation and amortisation to consolidated interest expense, being no less than 1.5 times (compared to 2.0 times) from 31 December 2025 to 31 December 2026. The implementation of the Growth and Value Up Plan formed the basis of the Manager’s discussion with the lenders in relation to the MRA Concessions. The MRA Concessions alongside the Growth and Value Up Plan are expected to provide the Group with sufficient time and means to achieve the Net Proceeds Target. Further to the granting of the MRA Concession relating to Bank ICR in (ii)(b) above for an additional six months beyond the Updated Disposal Deadline of 30 June 2026, the lenders have required the Group to continue complying with two existing conditions under the Master Restructuring Agreement for the same extended period. Specifically, the Group must (i) maintain the interest reserve requirements and (ii) keep half-yearly distributions to Unitholders suspended until the later of the achievement of the Reinstatement Conditions and the period during which the Bank ICR relaxation remains in effect. As disclosed in Notes 6 and 26, subsequent to the year end, on 30 March 2026, the Manager announced the Group’s proposed divestment of Figueroa to a third-party purchaser (the “Purchaser”) for US$92.5 million (the “Proposed Divestment”), and the estimated net sale consideration to be realised from the divestment is US$85.7 million. In view of the Proposed Divestment, the property has been reclassified as an asset held for sale as at 31 December 2025. 1 For the avoidance of doubt, in the event that the sale of any existing property would result in the aggregate net proceeds increasing from an amount below US$350.0 million to an amount exceeding US$350.0 million, the sale of such existing property is also deemed approved by the Disposition Mandate. / 110 / EXPANDING HORIZONS
RkJQdWJsaXNoZXIy NTM2MDQ5