Perth-based property fund manager Aspen Group has secured an investor to underwrite at least $5 million needed to meet loan requirements for its troubled Diversified Property Fund.
Perth-based property fund manager Aspen Group has secured an investor to underwrite at least $5 million needed to meet loan requirements for its troubled Diversified Property Fund.
Aspen said in a statement on the ASX that the unnamed investor would ensure the fund met all its finance facility obligations.
Aspen raised roughly $10 million from an entitlement offer, leaving the fund about $5 million short of meeting lending requirements negotiated with its financier NAB. It also raised $18 million through the sale of two properties to help pay down its debt.
The fund's finance facility obligation falls due on October 1.
The fund launched its entitlement offer in June - hoping to raise a minimum $15 million - after getting caught with a highly-geared portfolio as the credit crunch took hold, which led to the fund falling foul of its loan covenants with NAB.
The fund is one of several around the country to have run into trouble, with Melbourne-based Orchard Funds Management recently calling in KPMG to help restructure its troubled property portfolios.
The raising of $33 million through the entitlement offer, underwriting investor and sale of two properties means the fund will not have to sell properties into a subdued market.
Full announcement below:
Aspen Funds Management Limited ("AFM") as responsible entity for the Aspen Diversified Property Fund (the "Fund") is pleased to announce that it has now successfully completed the minimum equity raising and asset sale requirements to ensure it will meet all finance facility obligations of the Fund.
Further to the ASX announcement of 17 August 2009, the minimum $33 million in required funds has now been secured:
- Approximately $10 million of the $15 million minimum equity component has been raised through existing unitholders under an Entitlement Offer ("Offer") with applications from existing and new unitholders continuing to be received. AFM has secured an investor to underwrite any shortfall to the Offer, thereby ensuring the
minimum of $15 million will be reached.
- The required gross asset sales of $18 million have been achieved with the sale and now settlement of both Riseley Corporate Centre and Champion Drive Shopping
Centre.
As a requirement of the underwriting agreement, Aspen Group Limited ("AGL") has committed to acquire any of the underwritten units not divested by the underwriter at the end of a two year period, or earlier at AGL's discretion.
Under the terms of the Offer, the Fund is able to raise a maximum of $25 million and wil remain open to new and existing investors until further notice. The Fund expects the initial allotment of units to occur by 15 September 2009.
