City Pacific investors may have option to redeem
Troubled financial services group City Pacific is currently considering a number of restructuring proposals intended to generate liquidity for those investors in City Pacific’s First Mortgage Fund (FMF) that wish to redeem.
The board has commissioned a report in an effort to determine which proposal will deliver the most cash for shareholders wanting to claim back their investments.
One of the options could offer FMF investors ordinary shares in City Pacific. According to City Pacific company secretary James Finucan, this will provide FMF investors with liquidity and an ability to exit at will through the share market.
Recently, City Pacific announced it had received an extension for the repayment of the FMF finance facility. There was a rapid decline in the company’s share price in March this year amid reports that the FMF might struggle to repay its $240 million debt within three months.
City Pacific has negotiated an extension for the date of repayment of the FMF’s banking facilities to July 31, 2008. The FMF’s debt to bankers is currently $180 million, reduced from $240 million three months ago.
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