Friday, September 13, 2013

Sabana REIT Placement Issue

Sabana REIT issued a private placement of 40,000 lots @ $1 today, to raise fund for their new Chai Chee Lane acquisition. With the additional of the new units, the total units in issue will increase by 6.2%.

In my opinion, the management should have done better with a rights issue instead of private plcaement to benefit the existing uniholders. With private placement, they have in effect erroded the values in share holding for retail investors. I can't help but have a feeling that they are taking values from the REIT with their left hand to pay the dividends with their right. This certainly have not put the management in a good light.

It does not help that Sabana forms the majority pie for my portfolio. For now, I would still keep my holdings as it still gives good dividends. But it has certainly casted a shadow on my impression of the management.


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