Dasin Retail Trust’s China unit could face legal action if it fails to pay back offshore loans

[SINGAPORE] Dasin Retail Trust announced on Monday (Aug 4) that its China subsidiary Zhongshan Yuanxin Commercial Property Management could face a legal action over its breach of an inter-creditor deed.

The unit had made a 150 million yuan (S$26.9 million) repayment on outstanding onshore liabilities around mid-June 2025, which was not authorised by the trustee-manager’s board. This was according to an Aug 1 letter issued to Zhongshan by Maybank’s Singapore branch, as the offshore facility agent for banking facilities offshore lenders granted to Dasin’s trustee-manager.

As Zhongshan’s loan repayment brought its outstanding onshore loans below a minimum threshold required to be maintained, it constitutes “serious breaches” of the inter-creditor deed, the letter wrote.

An inter-creditor deed that Zhongshan had entered into in relation to the onshore loans requires a minimum of 350 million yuan in onshore loans to be maintained until the discharge date of Zhongshan’s offshore loans. Dasin had taken up onshore and offshore loans from 2021 to 2022 to finance the acquisitions of its initial portfolio.

“It is evident that the parties intended for the offshore liabilities (as defined in the inter-creditor deed) to be repaid at the same time or before the onshore liabilities are fully repaid,” according to the letter.

Additionally, a clause in the inter-creditor deed recognises that monies should not be used to discharge the onshore liabilities ahead of the offshore liabilities, it noted.

“Given that the offshore loans… are currently due and outstanding, any available funds generated by the relevant properties … should be transferred to the trustee-manager (or other relevant entity) to repay the outstanding offshore liabilities.”

Noting that Zhongshan’s loan repayment “caused loss and damage to the offshore finance parties”, the letter said: “Any further purported voluntary repayment of the remaining onshore liabilities and/or discharge of security by Zhongshan is impermissible and will further prejudice the offshore finance parties.”

Unless the offshore liabilities are paid in full within a five-day window starting from Aug 1 – the date the letter was issued – the offshore facility agent said that it would exercise its rights to take “any action which it deems necessary to protect its interests without further notice to Zhongshan”. This could include commencing legal action.

Units of Dasin Retail Trust have been suspended from trading since Jul 21 as the business trust was unable to comply with listing rules requiring the timely release of financial results and the holding of annual general meetings.