Negotiations on the remaining $50 million facility are well underway.
Australand has also secured new lending covenants for its $950 million Multi Option Facility, the key changes being that the Interest Cover Ratio has been reduced from 2.5 times to 2 times and the Gearing Covenant reduced from 60% to 55%. Australand confirmed it continues to comply with all its debt covenants.
As a further component of its capital management strategy, Australand has recently contracted the sale of seven assets in its investment property portfolio with the aggregate proceeds of sale of approximately $76 million due to be received over the next three months. These sales were secured at an average discount to book value of 8 per cent.
Australand confirms that it currently expects its 2009 full year operating profit (before revaluations and significant one off items) to be down approximately 30% on the 2008 operating profit result, being at the lower end of the range previously advised to the market and reflects further deterioration in market conditions and an increase in financing costs.
Each of the above matters is addressed in detail in the Managing Director’s address to today’s Annual General Meeting, a full copy of which has been released to the market.