As a result of this substantial increase in redemption requests, the Directors of City Pacific Limited, the responsible entity for the First Mortgage Fund, have resolved to defer the payment of redemptions from the Fund for up to 180 days, in accordance with the terms of the Fund’s Constitution and Product Disclosure Statement (PDS).
Investors may continue to lodge valid redemption requests and once the deferred payment of redemptions resumes City Pacific will process these requests. The operations of the First Mortgage Fund will continue as normal in all other
respects, including the payment of distributions to all investors. Those investors who lodge a valid redemption request will continue to be paid distributions until their units in the Fund are redeemed.
City Pacific has made every effort to reassure our investors, who include the Directors and staff of City Pacific and our priority remains to preserve the quality and value of the assets in the First Mortgage Fund.
We are confident of meeting all redemptions. In taking this action the Directors have sought to protect all investors including those in term investments which constitute about eighty percent in value of investments.
The Directors believe it is in the best interests of all investors to preserve the value of the Fund by completing projects in the ordinary course of the Fund’s operations. This can only be achieved through deferring the payment of
redemptions and to allow for the orderly accumulation of cash in the Fund to meet all valid redemption requests.
The First Mortgage Fund has more than $1.1 billion in assets under management invested in cash and first mortgages over real property in Australia. The Fund focuses on quality developments in high growth areas within the leisure and lifestyle sector of the Australian property market and all loans are expected to be repaid in full in the normal course of the Fund’s operations.
The assets of the First Mortgage Fund are held separate to those of City Pacific Limited by the Public Trustee of Queensland.
A supplementary PDS has been issued for the First Mortgage Fund to reflect today’s decision of the responsible entity to defer payment of redemptions. A copy of the supplementary PDS is enclosed.
Recent investors are reminded that a 14 day cooling off period applies to all new investments. The cooling off period commences on the earlier of; the end of the fifth day after their investment is processed or when you received confirmation of your investment. The cooling off period does not apply to the reinvestment of Distributions. Please refer to section 2.8 of the PDS for more information.
The Directors and a number of City Pacific staff remain substantial shareholders in City Pacific Limited and investors in the First Mortgage Fund.
We will continue to keep you informed about the First Mortgage Fund and we ask that you contact our Client Relations Team on 13 47 69 should you have any questions.
CITY PACIFIC LIMITED
Managing Director & CEO