Circular to Unitholders - Suntec REIT

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SUNTEC REAL ESTATE INVESTMENT TRUST (Constituted in the Republic of Singapore pursuant to a trust deed dated 1 November 2004 (as amended)) Directors Mr Chiu Kwok Hung, Justin (Chairman) Mr Ip Tak Chuen, Edmond Mr Lim Hwee Chiang, John Mr Tan Kian Chew (Independent Director) Mrs Sng Sow-Mei (alias Poon Sow Mei) (Independent Director) Mr Lim Lee Meng (Independent Director) Mr Chow Wai Wai, John Mr Yeo See Kiat (Chief Executive Officer) Registered Office 9 Temasek Boulevard #09-01 Suntec Tower Two Singapore 038989 18 September 2007 To: Unitholders of Suntec Real Estate Investment Trust Dear Sir/Madam 1. SUMMARY OF APPROVALS SOUGHT The Manager is convening an EGM to be held on 8 October 2007 to seek the approval of Unitholders in respect of the resolutions relating to the Acquisition (Resolution 1), the Issue of Convertible Bonds (Resolution 2), the issue of Consideration Units (Resolution 3), the General Mandate (Resolution 4) and the Valuation of Real Estate Supplement (Resolution 5). Approval by way of an Ordinary Resolution (as defined herein) is required in respect of the resolutions relating to the Acquisition (Resolution 1), the issue of Consideration Units (Resolution 3) and the General Mandate (Resolution 4) while approval by way of an Extraordinary Resolution (as defined herein) is required for each of the other two resolutions. The following paragraphs summarise the approvals which the Manager is seeking from Unitholders. The resolutions relating to the Acquisition (Resolution 1), the General Mandate (Resolution 4) and the Valuation of Real Estate Supplement (Resolution 5) are not subject to, or contingent upon, any other resolution. For the avoidance of doubt, notwithstanding that the resolution relating to the Issue of Convertible Bonds is passed, the Manager is not obliged to, and has at all times the discretion whether or not to proceed with the Issue of Convertible Bonds. The resolutions relating to the Issue of Convertible Bonds (Resolution 2) and the issue of Consideration Units (Resolution 3) are subject to and contingent upon the passing of the resolution relating to the Acquisition (Resolution 1). 1.1 Resolution 1: The Proposed Acquisition of a One-Third Interest in One Raffles Quay (Ordinary Resolution) The Manager proposes that Suntec REIT acquires the ORQ Interest indirectly through the purchase of the entire issued share capital of Comina from the Vendor. The Trust Deed provides that for as long as the Manager is the manager of Suntec REIT and Cheung Kong and/or Mr Lim Hwee Chiang, John are controlling shareholders of the Manager, 10
all transactions between Suntec REIT and (i) Cheung Kong, (ii) Mr Lim Hwee Chiang, John, and/or (iii) an associate of Cheung Kong or Mr Lim Hwee Chiang, John shall be considered as interested person transactions under the Listing Manual. The Vendor, which is incorporated in British Virgin Islands, is a direct wholly-owned subsidiary of Cheung Kong, a company incorporated in Hong Kong. The Vendor is therefore considered an associate of Cheung Kong. In addition, as the Manager is 30.0% indirectly owned by Cheung Kong, the Vendor is regarded as both an associate and an associated company of the Manager under the Listing Manual and Cheung Kong is regarded as a “controlling shareholder” of the Manager. As such, the Acquisition will constitute an “interested person transaction” under Chapter 9 of the Listing Manual as well as an “interested party transaction” under the Property Funds Guidelines. Chapter 9 of the Listing Manual requires, among others, approval of Unitholders for an “interested person transaction” if the value thereof exceeds 5.0% of Suntec REIT’s latest audited net tangible assets (“NTA”). Paragraph 5 of the Property Funds Guidelines requires, among others, approval of Unitholders for an “interested party transaction” whose value exceeds 5.0% of Suntec REIT’s latest audited net asset value (“NAV”). The value of the Acquisition exceeds both the aforementioned thresholds. In compliance with the requirements of the Listing Manual and the Property Funds Guidelines, the Manager is therefore seeking Unitholders’ approval for the Acquisition. By approving the Acquisition, Unitholders will be deemed also to have approved the principal terms of the Restated Shareholders’ Agreement together with the terms which are incidental or ancillary to the Acquisition and the arrangement in the provision of asset management services by RQAM. As the Manager is an associate of Cheung Kong, the Manager shall abstain from voting on Resolution 1. (See “The Acquisition and its Rationale”, “Details Concerning the Acquisition and Joint Ownership of One Raffles Quay” and “Profit Forecast” at paragraphs 2, 3 and 6 for further details.) 1.2 RESOLUTION 2: THE PROPOSED ISSUE OF UP TO S$450,000,000 AGGREGATE PRINCIPAL AMOUNT OF S$ DENOMINATED CONVERTIBLE BONDS (EXTRAORDINARY RESOLUTION) The Listing Manual provides that specific prior approval of the Unitholders is required for an issue of convertible securities (which include the Convertible Bonds). Furthermore, the Trust Deed, read together with the Listing Manual, provides that specific prior approval of the Unitholders by Extraordinary Resolution is required for an issue of Units if the number of such Units (together with any other issue of Units, other than by way of a rights issue offered on a pro rata basis to all existing Unitholders, in the same financial year) would, immediately after the issue, exceed 10.0% of the outstanding Units. Assuming that the Manager proceeds with the Issue of Convertible Bonds, it is expected that the number of Conversion Units to be issued upon conversion of the Convertible Bonds, together with any other issue of Units, will immediately after the issue, exceed 10.0% of the outstanding Units. Accordingly, the Manager is seeking the approval of the Unitholders to issue the Convertible Bonds. By approving the Issue of Convertible Bonds, the Unitholders would be deemed to have approved the terms of the Convertible Bonds, and the issue of Conversion Units upon conversion of the Convertible Bonds. 11
Page 1 and 2: CIRCULAR DATED 18 SEPTEMBER 2007 TH
Page 3 and 4: One Raffles Quay is a prime landmar
Page 5 and 6: 3One Raffles Quay enjoys several ke
Page 8 and 9: Proposed Issue of Convertible Bonds
Page 10 and 11: copy of this Circular has been issu
Page 12 and 13: CORPORATE INFORMATION Directors of
Page 14 and 15: This page has been intentionally le
Page 16 and 17: OVERVIEW OF THE ACQUISITION Descrip
Page 18 and 19: Letter to Unitholders for further d
Page 20 and 21: • Income Diversification The Acqu
Page 22 and 23: aggregate number of new Units and c
Page 26 and 27: Approval in-principle has been obta
Page 28 and 29: 2.2 Rationale for the Acquisition T
Page 30 and 31: Scenario A: Forecast DPU (Assuming
Page 32 and 33: Scenario C: Forecast DPU (Assuming
Page 34 and 35: will decrease from approximately 87
Page 36 and 37: Suntec REIT will allot and issue su
Page 38 and 39: 3.6 Asset Management Agreement The
Page 40 and 41: (iv) Suntec REIT has extended one-t
Page 42 and 43: 4.2.2 Pro Forma NAV The pro forma f
Page 44 and 45: (c) the number of Consideration Uni
Page 46 and 47: Save as disclosed above and based o
Page 48 and 49: Forecast Consolidated Statement of
Page 50 and 51: For illustrative purposes only, bas
Page 52 and 53: and the existing Units will be aggr
Page 54 and 55: Accordingly, the Independent Direct
Page 56 and 57: 17. CONSENTS Each of the Independen
Page 58 and 59: Conversion Price : Has the meaning
Page 60 and 61: Hongkong Land : Hongkong Land Limit
Page 62 and 63: Property Funds Guidelines : The gui
Page 64 and 65: Trading Day : A day when the SGX-ST
Page 66 and 67: Based on ORQ Interest Forecast Year
Page 68 and 69: 2.2 Trade Sector Analysis for Exist
Page 70 and 71: This page has been intentionally le
Page 72 and 73: Conversion Price : For illustrative
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This page has been intentionally le
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Existing Properties (1) FY2008 S$(
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eference to (i) Gross Rent payable
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(c) (d) Property Tax It has been as
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The percentage of projected gross r
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(X) Income Tax Expense The forecast
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Events and circumstances frequently
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E-2
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Cheung Kong or Mr Lim Hwee Chiang,
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The Trustee shall extend the Purcha
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The acquisition fee payable to the
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5. METHOD OF FINANCING 5.1 The Fina
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5.5 The Proposed Issue of Considera
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Office Towers within Suntec REIT’
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Scenario A: Forecast DPU (Assuming
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Scenario C: Forecast DPU (Assuming
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6.5 Valuation of one-third interest
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(4) Forecast net property income pr
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Company Name Date of Circular Type
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(viii) the announcement by K-REIT A
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Singapore-sourced interest income S
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A Qualifying Foreign Non-Individual
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esident in Singapore and who does n
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accordingly. In addition, it is not
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ORDINARY RESOLUTION 3. THE PROPOSED
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IMPORTANT: PLEASE READ THE NOTES TO
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Circular to Unitholders - Suntec REIT

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