LIPPO-MAPLETREE - Lippo Malls Indonesia Retail Trust - Investor ...

Business and propertiesBecause of this unique nature of Indonesian land law, the SGX-ST has granted LMIR Trust a waiver fromcompliance with Rule 222(1) of the SGX-ST Listing Manual (the “Listing Manual”) which requiresproperties that have remaining leases of less than 30 years not to, in aggregate, account for morethan 50.0% of a company’s operating profits for the past three years.The Sponsor intends to procure the strata titles of these Retail Spaces prior to the Listing Date. However,the legal process to obtain these strata titles may be lengthy and may only be issued post listing. TheTrustee and the Master Lessee have entered into a put option agreement pursuant to which, in the eventthat the strata titles to these four Retail Spaces are not issued within 24 months from the Listing Date, ameeting of all the Unitholders will be convened by the Trustee pursuant to which the Unitholders will vote,by way of an ordinary resolution, on whether to retain these four Retail Spaces in the portfolio of LMIRTrust for a further six months from the date of the ordinary resolution. In the event that an ordinaryresolution is passed in favour of retaining these four Retail Spaces in the portfolio of LMIR Trust and thestrata titles are still not issued upon expiry of six months from the date of the ordinary resolution, theTrustee shall be entitled to exercise the put option. In the event that an ordinary resolution is not passed infavour of retaining these four Retail Spaces, the Trustee shall be entitled to exercise the put option withinthree months of the date of the meeting of the Unitholders.Upon exercising the put option, the Master Lessee will be required to purchase the entire issued andpaid-up capital of the relevant Indonesian SPCs of these four Retail Spaces at the consideration of thehigher of (i) the net asset value of the relevant Indonesia SPCs as at the date of service of the put optionnotice as determined from the audited consolidated accounts of the SPCs and (ii) the net asset valuebased on the value attributed to these four Retail Spaces for the purpose of the Listing, in each case, alsotaking into account all transaction costs incurred directly and indirectly by LMIR Trust for the acquisition ofthese four Retail Spaces. (See “Certain Agreements relating to LMIR Trust and the Properties—Description of the Put Option Agreements”.) The Trustee (acting on the advice and recommendationof, and after discussions with, the Manager) is satisfied with the computation of the said transaction costsas set out in the put option agreement. A 24-month period is sought as the length of time required for theland title office to issue the strata title is estimated to be more than 12 months. The parties will operate as ifLMIR Trust exclusively controls the strata titles to these four Retail Spaces during this 24-month period.The transfer of strata titles without prior written approval from Matahari will result in a breach of the KiosksSale and Purchase Binding Agreement.On 9 August 2007, the Trustee, the Manager and the Sponsor entered into a letter of undertaking,pursuant to which the Sponsor will to use its best endeavors to procure that the relevant Retail SpaceSPCs obtain the strata titles to the Metropolis Town Square Units, Depok Town Square Units, MalangTown Square Units and Grand Palladium Medan Units. (See “Certain Agreements relating to LMIR Trustand the Properties—Description of the Letter of Undertaking”.)The Trustee (acting on the advice and recommendation of, and after discussions with the Manager) is ofthe view that the proposed arrangements, namely the put option agreement and the letter of undertaking,adequately safeguard the interest of Unitholders if the legal titles to the four Retail Spaces are not issuedon the expiry of 24 months from the Listing Date.HGB titlesOne of the Retail Spaces, namely Plaza Madiun is held via a HGB title.(See “—The Retail Malls—Hak Guna Bangunan (“HGB”) titles”.)131