|There's a gross misinterpretation by some in the market of an 11 Oct announcement on private equity firm L Catterton Asia's sale of a partial stake in the Sponsor of Sasseur REIT.
No, L Catterton Asia didn't sell units in the REIT itself.
And since L Catterton Asia didn't sell any units, this media headline may convey the wrong impression: “Sasseur REIT loses PE firm L Catterton Asia as substantial unitholder”
The crucial fact is most of L Catterton Asia's interest in the REIT was a deemed interest because of its substantial stake in Sasseur Cayman Holding, the Sponsor of the REIT.
L Catterton Asia's deemed interest in the REIT stood at 58.86% largely because of its 22.8% stake in the Sponsor.
L Catterton Asia's stake in the Sponsor was held by its investment vehicle, Great World Shanghai Outlet.
Then, through an agreed buyback reflecting “a normal course of action for the fund," the Sponsor bought back its shares from Great World Shanghai Outlet, reducing the latter's stake to "between 10% and 15%" of the Sponsor.
That's still an important and strategic stake.
And representatives of L Catterton Asia continue to stay on the boards of the Manager of the REIT and the Sponsor and serve as director of the Manager as well as director of the Sponsor.
Confusion in the market arose because this fact was not discerned: As a result of L Catterton Asia's interest in the Sponsor falling below 20%, L Catterton Asia no longer had a deemed interest in the REIT's units held by the Sponsor.
L Catterton Asia was deemed to be interested only in the 16,000,000 units (1.36% stake in the REIT) held by Sparkling Gateway, which is part of L Catterton Asia.
That's how L Catterton Asia's deemed interest in the REIT fell from 58.86% to 1.36%.
L Catterton Asia added that it “remains confident in Sasseur’s growth opportunities as a leading premium outlet developer and operator in the People’s Republic of China.” The Chairman and Managing Partner of L Catterton Asia, Mr. Ravi Thakran, said in a press release: “We continue to strongly believe in the long-term growth prospects of Sasseur and the opportunities it offers to investors in terms of exposure to China’s fast-growing outlet mall industry. We will continue to support the company’s growth initiatives as a Sasseur shareholder.”