In August 2024, news broke that the Indonesian conglomerate, Lippo Karawaci, had sold off most of its shares in Siloam International Hospitals to CVC Capital Partners, which has now taken the reins as the majority shareholder. Not wasting any time, CVC Capital Partners quickly moved to make another strategic move. They’ve put forward a proposal to acquire the actual buildings from First REIT, where these hospitals operate. Given that Siloam contributes around 39% to First REIT’s annual rental income, this potential transaction is quite significant.
First REIT’s journey has definitely been a rollercoaster, and I have a personal connection to it, having invested in it in the past. It once enjoyed a solid trading position at S$1 per unit until Lippo Karawaci, its sponsor, made a series of decisions that turned the REIT’s prospects upside down. To understand the current situation better, let’s take a deeper dive into how its sponsor and management drove First REIT into a challenging situation.
