EC World REIT: Forchn backs out of potential acquisition of all of the REIT’s properties

EC World REIT's Stage 1 of Bei Gang Logistics, which comprises eight buildings, located in North Hangzhou, China. It is one of the largest e-commerce developments in the Yangtze River Delta. Credit: EC World REITEC World REIT's Stage 1 of Bei Gang Logistics, which comprises eight buildings, located in North Hangzhou, China. It is one of the largest e-commerce developments in the Yangtze River Delta. Credit: EC World REIT

Forchn International, which had approached EC World REIT‘s manager in May about a potential transaction for all of the REIT’s properties, has backed out of a potential deal, the REIT said in a filing to SGX Tuesday.

The manager had been in active negotiations with the purchasers to finalise the definitive terms and conditions of the potential transaction, which included fixing the purchase consideration based on the relevant offshore currencies to safeguard EC World REIT against fluctuations between renminbi and Singapore dollars/U.S. dollars (being the currencies in which the offshore loans of EC World REIT are denominated).

The purchasers have informed the manager that, in view of the current market conditions and the fluctuations in exchange rate between renminbi and Singapore dollars/U.S. dollars, they have decided not to proceed with the potential transaction as the bases on which the
purchasers had approached the manager in relation to the potential transaction have changed significantly.

Forchn International was leading the talks on behalf of a consortium, the filing said.

EC World REIT said the manager was committed to exploring new opportunities to enhance long-term value.