Cromwell review improves debt position
Property funds manager Cromwell Group has resolved to acquire two assets from its unlisted Cromwell Property Fund (CPF) as well as extend its existing debt facility with the group, following a strategic review of the fund.
Under the acquisition proposal the group will acquire two properties from CPF, as well as extending CPF’s existing debt until 30 June, 2012.
The first property in Exhibition St, Melbourne will sell for $90.2 million, with consideration being $80 million in cash and a $10.2 million reduction of CPF’s existing loan from the group.
The second property in Symonston, ACT will sell for $25 million, $12 million of which will be paid in cash and $13 million in a reduction of debt.
CPF has signed a non-binding agreement to lease the majority of the Exhibition St property with an ASX top 20 company, subject to a substantial refurbishment which has already begun.
Cromwell said it expects to send the compulsory explanatory memorandum and notice of meeting to security holders by mid June, with a vote expected by mid July.
If shareholders disapprove of the acquisition proposal, CPF will reimburse the group for any amounts paid for refurbishments in the form of a loan for an amount up to $28.5 million.
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