• EHT unitholders have rejected SC as
  replacement Manager; Lengthy restructuring efforts not in best interests of
  unitholders, causing depletion of REIT’s cash reserves; Sponsor constantly
  demonstrates its efforts to save the REIT
• Sponsor’s plans to rescue REIT
  blocked since August which, if acted upon, would have set the REIT onto path of
  recovery, instead of causing damage due to internal differences
• While successful businesses fight
  for unity during the pandemic, SC and the Trustee’s proposal would have
  provoked conflict and driven the REIT into further hardship

SINGAPORE – Media
OutReach – 30 December 2020 – Unitholders of Eagle
Hospitality Real Estate Investment Trust (EH-REIT) today rejected SC Capital
Partners (SC) as its replacement Manager at a 2:00 PM EGM (Extraordinary
General Meeting), held via a digital webcast.

 

Resolutions 1 to 4 were inter-conditional such
that they all had to be carried or fall together, although Resolutions 1, 3 and
4 were Ordinary Resolutions (requiring more than 50% of unitholders vote) and
Resolution 2 was an Extraordinary Resolution (requiring more than 75% of
unitholders vote). Votes were submitted electronically no later than 2:00 PM on
December 27th, 2020.

 

After the results of the voting were announced
today, it was found the SC was rejected as the replacement manager.

 

Urban Commons (UC), the Sponsor of EH-REIT, said
unitholders obviously want additional options, and it reiterated that it should
be allowed to table its plans devised since August 2020, which are in the best
interests of the unitholders. Since August, the Sponsor has attempted to table
multiple plans to demonstrate the best path to save the REIT but it has been
blocked from presenting the plans to unitholders.

 

“We believe that unitholders recognise
SC’s lack of experience in the US market, which is mature, unique and dynamic“,
said Howard Wu, Principal at UC. “The current pandemic has highlighted
structural complexities which, thanks to our experience in both the US market
and in the REIT property portfolio, puts us in a strong position to address. Ever
since our powers as REIT Manager had been restricted, we have witnessed the
REIT’s cash reserves being depleted through unnecessary restructuring efforts
on the recommendations of the REIT’s advisors and DBS Trustee. How is it
possible that our plans, which are designed with the best interest of unitholders,
remain unseen by unitholders? At the same time, alternative plans tabled by the
Trustee have been rejected by unitholders. Based on today’s vote, unitholders
clearly agree with our view that we are not heading in the right direction. Now
is the time to unite and act fast to save our REIT, and avoid liquidation at
all costs, which would be disastrous to all parties involved.”

 

UC also said that unitholders saw highly
uncertain elements at EH-REIT’s EGM that could allow the REIT vehicle to be driven
into more hardship. In particular, the fact that the REIT’s US$89.0 million
unsecured loan, taken from Lodging USA Lendco, LLC (Lendco), is currently past
due and in default, whereas EHT’s EGM stated it is not. Lendco has, on 14
August 2020, sent out the notice of default to EHT. This kind of action creates
uncertainty and may cause a major conflict with the lender. Furthermore, the
attempt to remove the Manager during a global pandemic is additional, internal,
conflict that will likely provoke further divisive actions between parties,
potentially resulting in the removal of the master lease. The Sponsor of EHT
remains adamant that now is the time to unite to save the REIT.

 

Wu added: “SC’s plan lacked a financial
commitment, of own capital, to the REIT. I can understand why
unitholders may be skeptical about a new Manager that has not contributed
capital, and therefore, does not have a real stake in the REIT. We believe this
is a major contributing factor in SC not receiving approval, as well as their plan
not outlining the injection or raising of capital to help the REIT through
these turbulent times. In addition, we saw some alarming elements to SC’s
proposal that could have caused unnecessary conflict between invested parties
at the detriment of unitholder value, and we are pleased that unitholders
recognised the same.”

 

The issuer is solely responsible
for the content of this announcement.

 

About Urban Commons

Urban
Commons is a Los Angeles-based real estate investment and development firm with
a successful track record of developing, repositioning, and rebranding assets
throughout the United States. The company focuses on improving under-managed
and underutilized assets by developing innovative solutions that promote
optimal economic, social, and environmental returns.

 

Since its
founding in 2008, Urban Commons has owned, operated and developed a variety of
real estate properties including several dozen hotels, apartments, retail,
office, and senior care, throughout the United States including the development
of nearly one million square feet of commercial retail space.

 

For more
information on Urban Commons, please visit: https://urban-commons.com/