Cromwell flags fund restructure

Publicly-listed property and funds management group Cromwell has flagged the purchase of key property assets from its unlisted Cromwell Property Fund (CPF) to clear the way for a recommencement of distributions to unit-holders.

The company has announced to the Australian Securities Exchange (ASX) that it will be writing to investors to give them an update on a strategic review of the CPF, which while still incomplete would involve the sale by CPF of properties in the Melbourne CBD and in Canberra.

The company said the properties in question were 321 Exhibition Street in Melbourne and the Therapeutic Goods Administration (TGA) complex located at Symonston in Canberra.

It said its two-thirds interest in the TGA complex was expected to generate $25 million, while the Exhibition Street property was expected to bring in the order of $90.2 million.

Cromwell said the sale proceeds would be used to reduce gearing within the Cromwell Property Fund, including part of its loan from Cromwell Group.

The ASX announcement said there were numerous issues that needed to be resolved before the Cromwell boards would be able to make a final decision about recommending the transactions to security holders.

However, it noted that the proposed transactions, if concluded, would be expected to ensure a stabilisation of the fund and allow a recommencement of distributions to unit-holders.