SINGAPORE – Manulife US Real Estate Investment Trust (Reit) has entered into a master restructuring plan to remedy its financial woes.

The announcement on Dec 18 came after all 12 lenders obtained the necessary approvals on the plan to raise funds through a mix of asset dispositions and a sponsor-lender loan.

Under the master restructuring agreement, the Reit would face default if its manager is no longer wholly owned by sponsor Manufacturers Life Insurance, or any successor of the sponsor which is wholly owned by the sponsor’s holding company Manulife Financial Corporation.

The level of Manulife US Reit’s facilities and its subsidiaries that may be affected by a breach of default event condition is US$1.18 billion (S$1.57 billion) as at Dec 18.

In a separate bourse filing on the same day, the Reit manager announced that the Reit had completed the divestment of the Park Place property in Arizona to a wholly owned subsidiary of its sponsor on Dec 15 US time.

Following the divestment, its portfolio consists of 10 office properties in Arizona, California, Georgia, New Jersey, Virginia and Washington.

The divestment is part of a master restructuring plan, or recapitalisation plan, announced on Nov 29, which estimated the divestment consideration to be approximately US$98.7 million.

On Dec 13, the Reit manager announced that 11 out of 12 of the Reit’s lenders had obtained the necessary approvals in relation to the restructuring plan while the remaining lender was pending financial board approval. Unit holders of Manulife US Reit on the following day voted overwhelmingly in favour of the plan.

The Reit’s units closed 0.3 US cent, or 3.6 per cent, lower at eight US cents on Dec 18. THE BUSINESS TIMES