This article is from the Australian Property Journal archive
THE delayed settlement of several transactions has forced City Pacific to amend its interim dividend by implementing a staggered payment.
Managing director Phil Sullivan said the 15 cent per share interim dividend payment date has also been amended, which was due on April 30.
Sullivan said the company had several transactions which were scheduled for completion in the first quarter of 2008 but due to the current volatility in the financial markets these settlements have been delayed.
“Although these transactions are not individually material to City Pacific, they collectively would have provided City Pacific with the ability to meet the interim dividend payment as previously announced.
“The directors believe it is no longer prudent to rely on the timing of the completion of these transactions in order to meet the interim dividend payment due on April 30, 2008,” he said.
“Following a review of all options, the directors late yesterday, in their monthly board meeting, determined to stagger the payment of the interim dividend and to retain additional cash for the company’s operating activities over the coming months,” he continued.
The 15 cent dividend will now be paid in five equal monthly instalments of 3 cents commencing May 30.
Sullivan said by implementing the staggered payment of the interim dividend, City Pacific will have sufficient funds to meet the payment schedule from the recurrent operating activities of the company.
“The directors believe shareholders would agree that it is prudent and in the best interest of shareholders and the Company to take this course of action.
“The directors stress that this is in no way an indication that future dividends will be affected,” he added.
City Pacific and the City Pacific First Mortgage Fund are lenders to the Donnelly Group for the construction of The Foundry development in Bourke Street, Melbourne.
City Pacific and the City Pacific First Mortgage Fund have been repaid approximately $40 million being the first tranche of an $87 million loan settlement scheduled for repayment. The remaining tranche will be settled in October of this year in accordance with the purchase contract.
Last month, City Pacific entered into a conditional contract to sell its interest in the Townsville Ocean Terminal and Future Development Area Project to CEC Group for $30 million.
Australian Property Journal
