Orchard delivers on some funds, not on others

property/fund-manager/chief-executive-officer/

27 July 2009
| By John Wilkinson |
image
image image
expand image

Orchard Funds Management will be paying distributions on seven of its funds this month, although its flagship diversified property fund income payments still remain suspended.

Distributions will be paid for the Childcare Property Fund, Essential HealthCare Trust, Hybrid Property Fund, Banksia St Heidelberg Joint Venture, Sydney Healthcare Trust, Barossa Valley Resort and the Primary Health Care Darlinghurst Syndicate.

However, other Orchard funds are still facing financing difficulties due to falling property values.

The Diversified Property Fund is likely to breach its interest cover ratios with National Bank, Bank of Scotland and Commonwealth in the near future, the manager said in a report to investors.

It repaid $3 million of debt at the end of this financial year and is required to repay a further $60 million by December 31.

The fund's assets are valued at $933 million and the manager has been selling properties to reduce debt.

The fund has borrowings of $365 million and in the 2009 financial year paid $700,000 of bank charges on the loan.

Orchard chief executive officer David Hinde said an independent review of the fund by KPMG was underway to look at restructuring alternatives.

“The result of this review is expected to identify a long-term solution to all stakeholders in the fund,” he said.

“Guidance on resuming distributions cannot be made until after the strategic review process has been considered and recommendations implemented.”

Orchard has also renegotiated an extension to its loan facility with the National Bank for another three years for its Commercial Office Fund.

The fund manager is again likely to breach the loan covenants of its National and Suncorp financing of $190 million due to falling asset values. It has unaudited assets of $391 million.

Hinde said plans for a $50 million capital raising for the fund had been completed and a Product Disclosure Statement would be issued shortly.

The manager is also considering a rights issue for its Chevron Renaissance Property Trust and a restructuring plan for the Primary Infrastructure Fund is also being finalised.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

5 months ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

5 months ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

7 months 1 week ago

The FSCP has issued a written direction to an adviser who charged clients “extraordinary fees” for inappropriate and conflicted advice, as well as encouraged them to swit...

1 week 5 days ago

ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager. ...

3 weeks 1 day ago

ASIC has confirmed the industry funding levy for the 2024–25 financial year, and how much licensees can expect to pay....

2 days 17 hours ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
2
DomaCom DFS Mortgage
95.46 3 y p.a(%)
5