Phew, it’s been another busy month, and I was involved in my military reserve training at the start of the month (i.e. “NSmen ICT” or “reservist training” in the local lingo), so with my completion of that, I am free to write about the two cash calls which I participated recently, on Croesus Retail Trust and Mapletree Commercial Trust.

The Edge article on CRT's internalization move, kindly provided by an anonymous netizen
The Edge article on CRT’s internalization move, kindly provided by an anonymous netizen

Croesus Retail Trust issued a preferential offer as they wanted to internalize their trustee-manager. According to what I’ve seen on various blogs and online forums, the sentiment seems to be that the major shareholders/managers of the business trust are attempting to cash out their initial investment and risk taken. The initial plan was to use most of the cash raised from the PO to pay for the “purchase” (i.e. a cash-out), but it has somehow scaled back to a smaller cash hoard for the payment, and then following that up with management making purchases off the market, and reinvesting the cash they got from the cash-out into the trustee-manager. Perhaps someone high up got the scent of distrust and suspicion of retail investors from the online discussions? In any case, the “newer” offer seems to be much more palatable. There are some who still think it’s a pretty bad deal, of course, but my view is that it’s an acceptable deal, made even sweeter with the on-market purchase to fund the cash-out.

Overall I’m pretty pleased with the management for this business trust, although they have a tendency to be a little bit on the “fat management” side. However, as I do not want to over-expose myself to this individual security, I took up the minimum amount allocated to me.


Mapletree Commercial Trust also issued a preferential offer, and it was to acquire a property from their sponsor (i.e. Mapletree Investments) – unsurprisingly, it was Mapletree Business City 1, and the PO price was quite attractive for most investors at a 8.4% discount to the REIT’s last traded price on 1 Aug 2016. However, as I was an IPO holder of MCT, I had to do my homework on this, and I found out that I had to “return” 75% of whatever dividends I’ve collected from MCT since IPO till now to “follow” the trust (or management?), or risk dilution. Even though my margin of safety is pretty high, I eventually decided to bite the bullet and raise my average purchase price by taking up the minimum amount (again).

Well, that’s all for now, and I suspect there will be more cash calls on REITs by the end of the year, so I won’t be surprised at all. Time to keep my wallet tight till Christmas, I guess.