Pavilion Real Estate Investment Trust (KLSE:PAVREIT) entered into conditional sale and purchase agreement to acquire Elite Pavilion from Urusharta Cemerlang (KL) Sdn Bhd for MYR 580 million on July 27, 2017. The deal value is payable in cash and subject to adjustments. Pavilion Real Estate Investment Trust will not be assuming any liabilities, including contingent liabilities and/or guarantees, under the deal. The deal value is paid in tranches with the tranche 1 (10% of deal value equal to MYR 58 million) being paid by Pavilion Real Estate Investment Trust upon execution of the agreement towards the deposit while trance 2 (81.5% of deal value equal to MYR 472.7 million) will be paid within 30 days after the receipt of the payment notice for tranche 2, with the payment notice for tranche 2 being issued upon the occurrence of the last of the (a) the agreement becoming unconditional and effective when the last of the conditions precedent is fulfilled or waived; and (b) the redemption statement cum undertaking and disclaimer of interest is delivered by Maybank Investment Bank to Pavilion REIT Management Sdn Bhd, trustee of Pavilion Real Estate Investment Trust or its financier. The payment for tranche 2 is subject to some retention amount being kept by Pavilion Real Estate Investment Trust if Urusharta Cemerlang (KL) Sdn Bhd has either not completed the construction of the electrical sub-station or is yet to take certain approvals for the assignment for a subway linkage agreement. Tranche 3 and 4 (being 3% of deal value equal to MYR 17.4 million each) will be paid within 14 business days after the receipt of the payment notice for tranche 3 and tranche 4 respectively. Trance 5 (being 2.5% of deal value, equal to MYR 14.5 million) will be paid within 14 business days after the receipt of the payment notice for tranche 5. In a related deal, Pavilion Real Estate Investment Trust also signed a vesting agreement with Urusharta Cemerlang Sdn Bhd and Urusharta Cemerlang (KL) Sdn Bhd for the vesting of the extension-connections to the ELite Pavilion Mall (“vesting agreement) and conditional sale and purchase agreement with Urusharta Cemerlang (KL) Sdn Bhd for the disposal of the car park bays. In case of termination, when Urusharta Cemerlang (KL) defaults and Pavilion Real Estate Investment Trust terminates the deal due to this, Pavilion Real Estate Investment Trust, Urusharta Cemerlang (KL) will refund the tranche 1 deposit amount back to Pavilion Real Estate Investment Trust. In case there is default by Pavilion Real Estate Investment Trust and if Urusharta Cemerlang (KL) terminates the deal due to this, Urusharta Cemerlang (KL) can keep the deposit under tranche 1 as liquated damages. The deal will be funded by placement of shares, borrowings and/or internally generated funds of Pavilion Real Estate Investment Trust. The deal is conditional on consummation of due diligence, shareholder approval of Pavilion Real Estate Investment Trust, Securities Commission Malaysia approval, regulatory approval, third party approval and other conditions. The deal is also conditional on the vesting agreement and the sale of the car park bays. The completion of deal will take place on the date of payment of tranche 2 and concurrently with the completion of the vesting agreement, and when Urusharta Cemerlang (KL) Sdn Bhd delivers to Pavilion REIT Management the documents in relation to the completion of the agreement. As the proposed acquisition is expected to be completed in the fourth quarter of 2017, the proposed acquisition is not expected to have a material effect on Pavilion Real Estate Investment Trust’s earnings and distributable income for the financial year ending December 31, 2017. The audit committee has considered the deal to be fair. On October 19, 2017, the transaction was approved by Securities Commission Malaysia. As of December 21, 2017, Pavilion Real Estate Investment Trust announced the unitholders’ meeting will be held on January 16, 2018. On January 16, 2018, the unitholders of Pavilion Real Estate Investment Trust approved the transaction. As of March 23, 2018, the transaction becomes unconditional. CIMB Investment Bank Berhad, Maybank Investment Bank Berhad and Kenanga Investment Bank Berhad (KLSE:KENANGA) acted as financial advisors to Pavilion Real Estate Investment Trust. Knight Frank Malaysia Sdn Bhd was appointed as independent valuer by Pavilion Real Estate Investment Trust to value Elite Pavilion. Pavilion Real Estate Investment Trust (KLSE:PAVREIT) completed the acquisition of Elite Pavilion from Urusharta Cemerlang (KL) Sdn Bhd on April 27, 2018.