Shinhan Global Active REIT, a listed REIT (Real Estate Investment Trust) operated by Shinhan REITs Management, announced on the 28th that all agenda items, including the borrowing plan, were approved at the extraordinary general meeting of shareholders.
First, the agenda to reduce the capital reserve by 6.5 billion won to utilize it as a source for dividends was approved with an attendance rate of 48.85% and a favorable vote rate of 75.22%. The borrowing plan also passed the shareholders' meeting threshold with a favorable vote rate of 73.86%.
According to the borrowing plan, Shinhan Global Active REIT will sell part of its equity in three U.S. real estate funds (USGB, PRISA, CBRE USCP) to repay some or all of the borrowing fund of 39.7 billion won before September.
Shinhan Global Active REIT's borrowing fund has an annual interest rate of 8.5%, which has been pointed out as a factor of cost burden. Shinhan Global Active REIT plans to disclose the specific size of asset sales by March.
Shinhan Global Active REIT also decided to establish a credit line with a limit of 40 billion won to prepare for the settlement amount that may arise at the maturity of the hedge contracts in July and August. This is akin to opening a type of overdraft account.
If the won to U.S. dollar exchange rate is around 1,450 won at the time of the contract's maturity, Shinhan Global Active REIT will owe a total of 23.3 billion won as a hedge settlement amount. Shinhan Global Active REIT plans to set the interest rate on the credit line at around 5%.
Shinhan Global Active REIT was listed last July with an offering price of 3,000 won. However, due to the sluggish U.S. real estate market and the sharp rise in the won to dollar exchange rate, it has remained at 1,645 won based on the closing price on that day.
Shinhan Global Active REIT emphasized at the shareholders' meeting that the current stock price is undervalued. The net worth reflecting the hedge settlement amount is around 2,300 won per share, which is approximately 39% higher than the current stock price.
A representative of Shinhan Global Active REIT said, "We will do our best to pay the scheduled dividends through asset sales according to the borrowing plan."