Soilbuild Business Space REIT - OCBC Investment 2016-05-19: Issuance of Writ of Summons to Technics Oil & Gas

Soilbuild Business Space REIT - OCBC Investment 2016-05-19: Issuance of Writ of Summons to Technics Oil & Gas SOILBUILD BUSINESS SPACE REIT SV3U.SI 

Soilbuild REIT: Issuance of Writ of Summons to Technics Oil & Gas

  • Soilbuild Business Space REIT (Soilbuild REIT) announced that it has filed a Writ of Summons and Statement of Claim in the High Court of Singapore against its tenant Technics Offshore Engineering Pte Ltd (TOE) at its 72 Loyang Way property, as well as against Technics Oil & Gas (Technics), which is the guarantor of TOE. 
  • Soilbuild REIT is claiming a sum of S$2.19m for TOE’s default in payment of rent and other outstanding sums. Technics, as the guarantor, had previously undertaken to pay the rent and all other sums payable under the lease agreement in the event that TOE defaults on payment. However, Technics has yet to furnish the security deposit payable in respect of the second year of the lease from the tenant. 
  • The silver lining is that Soilbuild REIT holds a bank guarantee amounting to S$11.8m, which is equivalent to 18 months of rent, as part of its security deposit. 
  • Soilbuild REIT had completed the acquisition of this property on 27 May 2015. Hence, management does not expect an immediate financial impact on its DPU for FY16. 
  • We keep our BUY rating and S$0.82 fair value for now, but will watch the developments closely.




Wong Teck Ching Andy CFA OCBC Securities | http://www.ocbcresearch.com/ 2016-05-19
OCBC Securities SGX Stock Analyst Report BUY Maintain BUY 0.82 Same 0.82


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